GEORGE ARAKELIAN FARMS, INC., Petitioner, v. AGRICULTURAL LABOR RELATIONS BOARD, Respondent. UNITED FARM WORKERS OF AMERICA, AFL–CIO, Real Party in Interest.
In these original proceedings to review a decision of the California Agricultural Labor Relations Board (ALRB or Board), petitioner George Arakelian Farms, Inc., (Arakelian or petitioner) seeks to overturn the Board's order and decision of October 9, 1987, which denied its petition to reopen the record in 6 ALRB No. 28. The purpose of the motion to reopen was to enable the Board to take evidence with reference to reconsidering the Board's imposition of make-whole relief for losses sustained by Arakelian's employees as a result of its refusal to bargain with real party in interest United Farm Workers of America, AFL–CIO (UFW or union), the employees' elected and certified representative.
The issue thus presented for review is whether the Board, before it can impose make-whole relief, must determine factually whether a collective bargaining agreement between Arakelian and UFW would have been consummated but for the refusal to bargain. Such issue requires interpretation of William Dal Porto & Sons, Inc. v. Agricultural Labor Relations Bd. (1987) 191 Cal.App.3d 1195, 237 Cal.Rptr. 206, more particularly whether the rule in that case is applicable in “technical” refusal-to-bargain cases. Dal Porto set aside make-whole relief, entered following an order at the compliance stage finding that the employer had engaged in an unfair labor practice by refusing to bargain in good faith with the employees' union. Dal Porto remanded the matter to the ALRB for further proceedings because it had failed to make a finding that the parties would have consummated a collective bargaining agreement “but for” the failure to bargain in good faith.
The issue resolved in Dal Porto was whether the ALRB had exceeded its powers under section 1160.3 of the Labor Code when it conclusively presumed that make-whole relief is due whenever an employer has been found in violation of section 1153 of the Labor Code for failure to bargain in good faith with the union selected by the employees. In resolving such issue, the Dal Porto court stated, “[W]e hold [Labor Code] section 1160.3 necessarily contemplates make-whole relief may be imposed only where the parties would have entered into a collective bargaining agreement providing for higher pay in the absence of the employer's refusal to bargain.” (Id., at p. 1205, 237 Cal.Rptr. 206.) In other words, before the Board can impose make-whole relief in cases where there has been a failure to bargain in good faith, the board, as prescribed by Dal Porto, must take evidence and then make a finding on the factual issue of whether a collective bargaining agreement would have been reached “but for” the unfair labor practice of failing to bargain in good faith.
However, in implementing Dal Porto, the ALRB has elected to interpret the decision as permitting a differential application and to apply only in cases where the failure to bargain in good faith has actually occurred at the bargaining table. In the instance of petitioner here, there was a refusal to bargain at all, and the Board's order of October 9, 1987, determined that the “technical” refusal to bargain constituted a situation in which the Dal Porto rule was inapplicable. Just why the refusal to bargain at all occurred calls for a brief recapitulation of the proceedings in this case, a case which appears to have acquired a life of its own.
SYNOPSIS OF PROCEDURAL HISTORY
Following the representational election held on December 15, 1976, at the instance of UFW petitioner timely filed objections to the conduct of the election pursuant to applicable law and regulations. Except for one objection set for hearing, the Board's Executive Secretary denied and dismissed all of petitioner's other objections without investigation or hearing. Petitioner then filed a request for review by the Board challenging the Executive Secretary's summary dismissal of all but one objection, which the Board denied on the ground that the request for review was untimely made. Following hearing on the remaining objection, the Board's hearing examiner, despite a number of access-rule violations by UFW, determined there was no evidence that the violations had had any coercive effect on the voting employees or had affected the outcome of the election. Although petitioner filed timely exceptions to the hearing examiner's findings and decision, the Board dismissed the exceptions and certified UFW as the exclusive bargaining representative for petitioner's agricultural employees.
Desiring judicial review of such certification and of the Board's election/certification processes, petitioner took the only action available to obtain such review; it refused to bargain with UFW. The choice to forego bargaining in order to obtain judicial review of the Board's certification process is known as a “technical” refusal to bargain. (See J.R. Norton Co. v. Agricultural Labor Relations Bd. (1979) 26 Cal.3d 1, 27, 160 Cal.Rptr. 710, 603 P.2d 1306). In this context, when ALRB General Counsel received this unfair labor practice charge from UFW, alleging unlawful failure to bargain on the part of petitioner, General Counsel, pursuant to agency procedure, issued a complaint charging petitioner accordingly. The complaint was submitted to the Board directly on stipulated facts, thus bypassing a needless hearing by an administrative law judge. Thereupon the Board not only found petitioner guilty of a violation of the Agricultural Labor Relations Act (ALRA) for refusing to bargain with UFW, but imposed make-whole relief against petitioner because of its failure to bargain. (George Arakelian Farms, Inc. (1978) 4 ALRB No. 53.
Arakelian's petition to this court for review followed, wherein it contended, among other things, that the Board's routine imposition of make-whole relief “whenever an employer has been found to have refused to bargain” without distinguishing between technical refusal to bargain cases and other bad faith or refusal to bargain cases was improper under the ALRA. At the time the petition for review was filed, there was no California appellate decision dealing with the validity of the Board's “blanket” imposition of make-whole relief in all refusal-to-bargain cases. Hearing on Norton, which was later to decide this question, had likewise not been granted by the Supreme Court at the time the petition for review was filed here.
Accordingly, this court issued a writ of review. Upon learning that the California Supreme Court had granted hearing on Norton, which addressed some of the same issues as Arakelian's petition, including the blanket imposition of make-whole relief, this court opted to hold Arakelian's petition in abeyance, pending the California Supreme Court's decision in Norton.
After the California Supreme Court declared the Board's routine imposition of make-whole relief to be inappropriate in technical, refusal to bargain cases (J.R. Norton Co. v. Agricultural Labor Relations Bd., supra, 26 Cal.3d 1, 29 et seq., 160 Cal.Rptr. 710, 603 P.2d 1306), this court remanded Arakelian's petition to the Board for reconsideration in light of Norton. Upon remand, the Board again imposed make-whole relief on petitioner. (George Arakelian Farms, Inc. (1980) 6 ALRB No. 28.) Arakelian again petitioned for writ of review, which was issued.
In our opinion, which followed the hearing in that matter, but which was annulled when the Supreme Court granted a hearing, we determined, in light of Norton, that presumptive imposition of make-whole relief was inconsistent with the purpose of the ALRA. More particularly, Justice Kaufman's analysis included the view that the Board's implied conclusions that Arakelian's objections to the election had been pursued in bad faith and as a dilatory tactic were without evidentiary foundation and thus that the imposition of make-whole relief was contrary to Norton and inconsistent with the purpose of the ALRA.
The Board and UFW petitioned for review by the Supreme Court; the petition was granted, and that led to the opinion in George Arakelian Farms, Inc. v. Agricultural Labor Relations Bd. (1985) 40 Cal.3d 654, 221 Cal.Rptr. 488, 710 P.2d 288. The Supreme Court reached the opposite result from ours, doing so essentially by reaching a different conclusion with reference to the evidentiary showing as to the validity of the certification election together with holding that Arakelian had failed to exhaust his administrative remedies. Justice Kaus, writing for a 5–2 majority, stated, “The award of make-whole relief shall be upheld. We reach this conclusion based on the failure to exhaust administrative remedies and the insufficiency of the declarations as to the bias and misconduct allegations. These considerations, coupled with the resounding margin (92 percent) of the union's victory, preclude a reasonable belief that Arakelian had a meritorious challenge to the integrity of the election when it refused to bargain.” (Id., at p. 668, 221 Cal.Rptr. 488, 710 P.2d 288.)
The story then moved forward to Dal Porto. As earlier noted, that decision set aside make-whole relief in a case where the Board had not made a finding that the parties would have entered into a collective bargaining agreement “but for” the failure to bargain in good faith. That decision was filed May 12, 1987. Acting upon such decision, Arakelian filed its motion to reopen on August 25, 1987. The Board's order and decision here under review, which denied the motion, was filed on October 9, 1987. The original petition seeking review of that order was filed with us on October 30, 1987, and notice thereof with the customary briefing schedule was filed November 3, 1987.
Of interest in passing is the fact, after Dal Porto became final in July of 1987, that the Board issued an Interim Order in 13 ALRB No. 8 1 on November 16, 1987, of which we take judicial notice per petitioner's request filed December 28, 1987. That order included a statement, directed at other employers besides Mario Saikhon, Inc., that the “․ parties who seek to have the Board consider the applicability of Dal Porto to the bargaining makewhole order against them are directed to file with the Board ․ pleadings in the nature of a Motion to File Supplemental Brief, Motion to Reopen the Record, or Motion to Reconsider the Imposition of Makewhole pursuant to Dal Porto. This directive, however, does not apply to any such parties who are engaged in a purely technical refusal to bargain for the purpose of testing in court the Board's certification of an exclusive bargaining representative. ” (13 ALRB No. 8, at p. 5, emphasis added.) In a revealing footnote to that order, the Board said, “Our reading of the Dal Porto decision indicates that the court did not consider the rationale for its holding to be applicable in technical refusal to bargain cases as there would, in such situations, be no bargaining history upon which to base a determination that legitimate disagreement on crucial issues precluded the reaching of a contract. (Dal Porto, supra, [191 Cal.App.3d] pp. 1206, 1209 [237 Cal.Rptr. 206].)” (13 ALRB No. 8, at p. 5, fn. 5.)
In any event, the order of October 9, 1987, here under review, perhaps telegraphing what the Board was going to say in the Interim Order of November 16, 1987, as above partially quoted, concluded that “[i]n such cases [technical refusal-to-bargain cases] it cannot be disputed that the employer's own conduct has prevented the consummation of a collective bargaining agreement.” (Order Denying Respondent's [Arakelian's] Motion to Reopen the Record, at pp. 2–3, emphasis added.)
Real party UFW, in opposing the petition, makes several contentions. First, it argues that the order here under review is not a final order subject to our review per section 1160.8 of the Labor Code. Not so. Because the order operates to deny Arakelian an opportunity to challenge the make-whole relief order now entered against him, he is “․ a person aggrieved by a final order of the Board ․” within the meaning of Section 1160.8. Otherwise, and equally important, if not more so, is the circumstance that the Board has not here challenged our jurisdiction to review.
Turning to UFW's next contention, in its original opposition, it argued primarily that the Supreme Court decision 2 which affirmed the make-whole relief imposed in 6 ALRB No. 28 is res judicata. The fact that this matter began back in 1976 and is still not resolved, alone, gives some practical weight to UFW's argument. However, the Board's Interim Order of November 16, 1987, supra, issued in response to Dal Porto, is answer enough to such argument. However, and more particularly, the Board in opposing UFW's contentions on this point correctly argues that the doctrine of res judicata can only apply where issues sought to be precluded from relitigation have themselves actually been litigated in a prior proceeding. (See 7 Witkin, Cal.Procedure (3d ed. 1985) Judgment, § 194, at p. 630, citing Estate of Charters (1956) 46 Cal.2d 227, 293 P.2d 778.) The Dal Porto issue of the “but-for” cause of the parties' failure to reach an agreement has never been litigated in Arakelian's case. Hence, the res judicata doctrine does not apply to preclude further proceedings here.
Thus, we come to the key issue presented for review, requiring an interpretation of Dal Porto, more particularly whether its rule is also applicable in “technical” refusal-to-bargain cases. In our view, based upon the reasoning in Dal Porto, the rule therein announced is equally applicable in all refusal-to-bargain cases, technical or otherwise.
The starting point of our analysis of Dal Porto is language from the decision which reads, “We note first that section 1160.3 authorizes make-whole relief not as a penalty for unacceptable conduct but rather for the purpose of ‘making employees whole ’ for losses of pay suffered by employees: ‘make-whole relief is compensatory in that it reimburses employees for the losses they incur as a result of delays in the collective bargaining process.’ (J.R. Norton, supra, 26 Cal.3d at p. 36, 160 Cal.Rptr. 710, 603 P.2d 1306.) The compensatory nature of make-whole relief is in accord with the established rule that the Board's ‘ “power to command affirmative action is remedial, not punitive, ․” ’ (Laflin & Laflin v. Agricultural Labor Relations Bd. (1985) 166 Cal.App.3d 368, 380, 212 Cal.Rptr. 415, quoting Sunnyside Nurseries, Inc. v. Agricultural Labor Relations Bd. (1979) 93 Cal.App.3d 922, 940, 156 Cal.Rptr. 152; italics in original.) If make-whole relief were imposed where the parties would not have entered into an agreement even had they bargained in good faith, the ‘relief’ would in fact be a penalty for the employer's bad faith bargaining. Had the Legislature intended to punish the employer in these circumstances, it could easily have said so.”
“Other language in section 1160.3 supports this view. Thus, a ‘loss of pay,’ upon which the remedy is based, necessarily assumes greater pay by which the loss is measured. The only logical place to locate the greater pay is in a collective bargaining agreement that would have been consummated but for the employer's refusal to bargain. By that construction, the loss of pay is one ‘resulting from the employer's refusal to bargain,’ as section 1160.3 requires, because the employer's refusal to bargain has wrongfully prevented consummation of an agreement. Consummation of a collective bargaining agreement is also consistent with J.R. Norton's conclusion the make-whole remedy is designed to redress losses caused by ‘delays in the collective bargaining process.’ (J.R. Norton, supra, 26 Cal.3d at p. 36, 160 Cal.Rptr. 710, 603 P.2d 306.) ‘Delay ’ necessarily implies a conclusion happens later. Here, the only logical conclusion is consummation of an agreement.” (William Dal Porto & Sons, Inc. v. Agricultural Labor Relations Bd., supra, 191 Cal.App.3d 1195, 1204–1205, 237 Cal.Rptr. 206, emphasis in original.)
In other words, because the calculation of make-whole relief necessarily requires projecting the terms of a hypothetical collective bargaining agreement which would have been entered into “but for” the failure to bargain, it is relevant to show, if such evidence be available, that there are other reasons why no agreement could ever have been consummated. To impose make-whole relief notwithstanding that no agreement could ever have been consummated would operate to transform make-whole relief into a penalty, contrary to its compensatory nature as defined by the authorities cited in that portion of Dal Porto above quoted.
As a matter of logical conclusion, the foregoing would apply regardless of why there was no bargaining in good faith by the employer. Such conclusion is implicit in the further language of the court that “[w]e agree with [the employer] that consummation of a collective bargaining agreement is necessarily implied in section 1160.3 as a prerequisite for application of the make-whole remedy.” (Id., at p. 1204, 237 Cal.Rptr. 206.)
The several Amici Curiae have speculated over why the Board has chosen to distinguish “technical” refusal-to-bargain cases as not within the ambit of the Dal Porto rule. However, we see no need to engage in such an exercise. We only note that the order here under review cited a passage from Dal Porto at page 1209 as the basis for the distinction it made. That language, as we read it, provides absolutely no logical basis for treating “technical” refusal-to-bargain cases any differently from so-called surface bargaining cases. Moreover, because the Board, in the order under review, cited no policy or other precedential reasons to justify its imposition of the conclusive presumption it chose to impose here on Arakelian, we hold it to be wholly unjustified either in logic or in law.
Accordingly, the rebuttable presumption as defined in Dal Porto and the attendant procedures otherwise therein described and amplified in the Interim Order of November 16, 1987, issuing in 13 ALRB No. 8, should be available to Arakelian.
The petition is granted, and the order of October 9, 1987, issuing 6 ALRB No. 28 is annulled. The matter is remanded to the Board with directions that it issue a new and different order granting Arakelian's motion to reopen the record in that matter, and that it thereupon proceed in the manner described by the Board in its Interim Order of November 16, 1987, issuing in 13 ALRB No. 8, reflecting the views contained in Dal Porto.
1. Mario Saikhon, Inc. and United Farm Workers of America, AFL–CIO.
2. George Arakelian Farms, Inc. v. Agricultural Labor Relations Bd., supra, 40 Cal.3d 654, 221 Cal.Rptr. 488, 710 P.2d 288.
McDANIEL, Associate Justice.
CAMPBELL, P.J, and HEWS, J., concur.