On Petition for Review and Cross-Application for Enforcement of an Order of the National Labor Relations Board
The opinion of the court was delivered by: Sentelle, Chief Judge:
Before: SENTELLE, Chief Judge, HENDERSON and GRIFFITH, Circuit Judges.
Opinion for the Court filed by Chief Judge SENTELLE.
Erie Brush & Manufacturing Corporation ("Erie") petitions for review of a National Labor Relations Board ("NLRB" or "the Board") decision finding that Erie violated section 8(a)(5) and (1) of the National Labor Relations Act ("the Act"), 29 U.S.C. § 158(a)(1), (5). See Erie Brush & Manufacturing Corp. and Service Employees International Union, Local 1, 357 N.L.R.B. No. 46, 2011 WL 3860605 (Aug. 9, 2011) ("Board Decision"). NLRB cross- petitions for enforcement of its order. Erie challenges the Board's finding of unlawful refusal to bargain, arguing that the parties were at a bargaining impasse. Alternatively, Erie argues that even if we uphold the Board's finding of an unfair labor practice, the bargaining remedy imposed exceeded the Board's authority. Because we conclude that substantial evidence does not support the Board's decision, we grant the petition for review and vacate the Board's decision and order. We need not decide the challenge to the Board's remedy.
Erie manufactures washing and polishing brushes at its facility in Chicago, Illinois. The Seventh Circuit enforced a previous NLRB order requiring Erie to recognize and bargain with the Service Employees International Union, Local 1 ("the Union") for at least one year. NLRB v. Erie Brush & Manufacturing Corp., 406 F.3d 795 (7th Cir. 2005). Erie began negotiations with the Union on June 28, 2005. At the parties' first meeting, the Union's chief negotiator, Charles Bridgemon, asked that the parties discuss non-economic issues before economic ones, and Erie's chief negotiator, Irving M. Geslewitz, agreed. Between June 28, 2005 and March 31, 2006, the parties met on eight occasions and reached agreement on all non-economic issues except two: union security and arbitration of grievances. The Union insisted on including union security and arbitration clauses in the contract. Erie was equally committed to an open shop and opposed to arbitration. During the meetings, Bridgemon repeatedly told Geslewitz that the Union had no room to compromise on union security or arbitration, calling those issues "make or break on [the] whole contract" and saying that the Union "can't work on these things" and "there wouldn't be a contract without a union security clause." Geslewitz was just as adamant, refusing to agree to a contract that contained union security or arbitration provisions.
At the March 31 meeting, Bridgemon repeated a previous offer to modify his position on arbitration if Geslewitz would agree to change the contract's no-strike provision, but Geslewitz again declined the offer. Bridgemon, according to his own testimony, told Geslewitz that he felt the parties were at an impasse on union security and arbitration, and Geslewitz agreed. Bridgemon suggested mediation, and Geslewitz said he would consult with Erie's president on the prospect of mediation even though he saw no potential middle ground on those two issues.
The parties next corresponded in a series of emails, beginning on April 5, 2006, when Geslewitz wrote to Bridgemon that Erie would not agree to mediation because neither party was willing to compromise on union security or arbitration, rendering mediation futile. Over a month later, on May 10, Bridgemon responded and suggested they negotiate economic issues and come back to the non-economic ones. On May 26, Geslewitz asked whether the Union's positions on union security or arbitration had changed, because otherwise further negotiations would be pointless. Bridgemon's May 31 response stated that he was "willing to continue to discuss the union security and arbitration issues with the local," and he again requested a meeting. Geslewitz's June 1 email asked whether Bridgemon had authorization to change his position and if so, whether he had a proposal to offer. A day later, Bridgemon said he had "some give on the arbitration issue" but not on union security, and declined to provide a proposal. Geslewitz responded that it was still pointless to meet unless union security was on the table, and that he wanted more information in the form of a proposal.
Nine days later, on June 16, the Union threatened to file an unfair labor practice charge, and shortly thereafter, the parties scheduled a meeting for July 24. But on July 5, an employee who was a member of the bargaining unit delivered to Erie's president a handwritten document signed by 18 of 21 bargaining unit employees. The document stated (in Spanish) that the employees of Erie (most of whom have Spanish surnames) did not want to be represented by the Union. Based upon this petition, Geslewitz informed Bridgemon that Erie was withdrawing recognition and canceling the July 24 meeting.
After the Union brought unfair labor practice charges, the Board's General Counsel issued a complaint. An NLRB Administrative Law Judge ("ALJ") found that Erie had violated section 8(a)(5) and (1) by refusing to bargain with the Union between May 10 and June 21, 2006. Board Decision at 12 (ALJ Op.). The ALJ held that this refusal to bargain tainted the employees' decertification petition, so that Erie's withdrawal of recognition of the Union also violated section 8(a)(5) and (1). Id.
Erie filed exceptions to the ALJ's findings. A divided Board affirmed the ALJ's findings and order with only minor modifications. See id. at 1-5 (Board Op.). Member Hayes dissented from the Board's decision, stating that because the parties were at a bona fide impasse on union security and arbitration, he would reverse the ALJ's finding of unlawful refusal to bargain. Id. at 9 (Dissenting Op.).
As a remedy, the Board ordered Erie to cease and desist from refusing to bargain. Id. at 4-5 (Board Op.), 13 (ALJ Op.). The Board ordered Erie to recognize and bargain with the Union as the exclusive bargaining representative of Erie employees for at least six months. Id. Finally, the Board required Erie to physically post and electronically distribute a notice announcing that Erie would no longer engage in violations of the Act. Id.
Erie petitions this court for review, arguing that the Board's finding of unlawful refusal to bargain was not supported by substantial evidence in the record. In addition, Erie challenges the ...