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Arnaudo Brothers, L.P. v. Agricultural Labor Relations Board

California Court of Appeals, Fifth District

May 4, 2018

ARNAUDO BROTHERS, L.P. et al., Petitioners,


          ORIGINAL PROCEEDING; petition for writ of review. 2012-CE-030-VIS, 40 ALRB No. 3 & 41 ALRB No. 6

          Charley M. Stoll, Rachelle O. Tejada and Anne W. Nilsen for Petitioners.

          J. Antonio Barbosa, Paul M. Starkey and Todd M. Ratshin for Respondent.

          Martinez Aguilasocho & Lynch and Mario G. Martinez for Real Party in Interest.


          FRANSON, J.

         This writ proceeding addresses decisions by the Agricultural Labor Relations Board (Board) that an agricultural employer committed unfair labor practices by refusing to bargain with, and provide information to, the United Farm Workers of America (Union). The employer's defense was that in the early 1980's, the Union expressly disclaimed any interest in representing the bargaining unit-a disclaimer reinforced by the Union's 30 years of inactivity. The Board rejected the employer's disclaimer defense to the failure to bargain charge, finding the purported disclaimer was not clear and unequivocal. The Board awarded make whole-relief based on the determination that the employer's litigation of the disclaimer issue did not further the policies and purpose of the Agricultural Labor Relations Act of 1975 (Lab. Code, §§ 1140-1166.3).[1] The employer contends the Board erred in rejecting its disclaimer defense and in awarding make-whole relief.

         In August 2017, we issued a decision concluding the Board properly rejected the employer's disclaimer defense to the charge that employer failed to bargain with the Union, but erred in determining make-whole relief was “appropriate” for purposes of section 1160.3. The California Supreme Court granted review pending its decisions in Gerawan Farming, Inc. v. Agricultural Labor Relations Bd. (2017) 3 Cal.5th 1118 (Gerawan) and Tri-Fanucchi Farms v. Agricultural Labor Relations Bd. (2017) 3 Cal.5th 1161 (Tri-Fanucchi). In March 2018, the Supreme Court directed us to vacate our decision and reconsider the matter in light of Tri-Fanucchi, which reinstated an award of make-whole relief that this court had vacated.

         Having received supplemental briefs and replies to the supplemental briefs, we conclude the Board did not err when it (1) identified and applied the rules that define when a certified union has made a disclaimer of interest in representing the bargaining unit; (2) determined the statement by the Union representative that “we're through with you” (if made) was not a clear and unequivocal disclaimer of interest; and (3) concluded the Union's subsequent conduct consistent with a disclaimer could not render the equivocal disclaimer effective. On the question of make-whole relief, the principles set forth in Tri-Fanucchi compel the conclusion that the Board properly exercised its broad discretionary authority when it awarded make-whole relief in this case.

         We therefore affirm the Board's decisions.



         Arnaudo Bros., L.P., a California limited partnership, and Arnaudo Bros., Inc., a California corporation, are the petitioners in this writ proceeding and were the respondents named in case No. 2012-CE-030-VIS before the Board. Steve Arnaudo, Leo Arnaudo and Greg Arnaudo are partners in Arnaudo Bros., L.P. The entities grow, harvest and pack asparagus and grow cannery tomatoes and alfalfa on approximately 6, 000 acres of land near Tracy, California. They directly hire their agricultural employees, which one estimate places at approximately 130 to 150 workers at the seasonal peak. During the proceedings before the Board, the partnership and the corporation stipulated they would be jointly liable for any statutory violations. Consequently, we refer to the partnership and the corporation collectively as “Grower.”

         The Union is a labor organization within the meaning of section 1140.4, subdivision (f) of the Agricultural Labor Relations Act. On January 14, 1977, the Union was certified by the Board as the exclusive bargaining representative of Grower's agricultural workers in San Joaquin County.

         Initial Bargaining

         After the election, five years of negotiations between Grower and the Union failed to result in a collective bargaining agreement. Contact between Grower and the Union ceased in late 1981 or the first half of 1982. Exactly what happened in the last few contacts between Grower and the Union in the early 1980's is uncertain. The uncertainty about how the negotiating process ended was not resolved by a finder of fact, which assumed certain testimony presented by Grower was accurate.

         2012 Renewal of Bargaining

         On August 7, 2012, after at least 30 years of silence, the Union sent Grower a letter seeking to renew negotiations on a collective bargaining agreement. The letter also requested information, including (1) separate employee lists for the 2011 and 2012 seasons; (2) maps of the properties used in Grower's operations; (3) the names and titles of Grower's representatives; (4) the name and license number of any farm labor contract used by Grower; (5) Grower's agricultural products; (6) the daily and yearly hours worked by employees; (7) a summary of employee benefits and wages in 2010, 2011 and 2012; and (8) copies of current employee manuals and policies.

         On August 27, 2012, the Union repeated its written request, informing Grower it would file a charge with the Board for refusals to bargain and furnish information if Grower did not respond within five days. Grower did not respond to either request within the time stated by the Union.

         Union Files Unfair Labor Practice Charges

         On September 10, 2012, the Union filed the charge that initiated the proceedings now before this court. The charge alleged Grower refused to provide information requested by the Union.

         The Union designated Guadalupe Larios to negotiate with Grower and its attorney, Robert K. Carrol. In response to Larios's September 24, 2012, email, Carrol did not respond directly to the dates proposed for the recommencement of bargaining, but stated he would contact her after returning from South America on October 9, 2012, to discuss preliminary questions such as (1) what happened at the bargaining table between 1977 and 1982 before the Union walked away, (2) whether the bargaining unit had changed dramatically in the past 30 years, (3) whom exactly the Union believed it was representing, and (4) whether the Union had comparable contracts it would send him for review.

         The parties continued to exchange communications during the following months. For example, on November 13, 2012, Grower provided the Union with a spreadsheet that included some of the requested information for approximately 200 employees who worked for Grower through March until October of 2012. The Union determined that over 100 of the addresses given were inaccurate.

         During the months the Union and Grower's attorney exchanged communications, Board's regional office investigated the charge filed by the Union. That investigation included serving a subpoena requesting some of the same information sought by the Union. During January 2013, Grower provided some information to the Union and Board. In a January 22, 2013, email to Larios, Carrol suggested that they discuss bargaining dates starting after Grower's employees returned to work “in a few more weeks.”

         In early February 2013, the Union filed a declaration with the Board requesting mandatory mediation and conciliation pursuant to section 1164.[2] Grower filed an answer to the declaration asserting the parties had made repeated attempts to find mutually agreeable dates to commence bargaining and the Union had unilaterally abandoned that effort. On February 13, 2013, the Board issued an order directing the parties to proceed with mandatory mediation. Due to scheduling conflicts among the parties, their counsel and the mediator, the first session of mandatory mediation was set for May 24, 2013.

         In April 2013, a field worker and employee of Grower circulated a document among other employees of Grower stating they did not want the Union's services or any other union. The document was signed by 86 employees.

         The Unfair Labor Practice Complaint

         On May 9, 2013, an unfair labor practice complaint, based on the September 2012 charges, was issued by the Board's general counsel. The complaint alleged Grower had committed unfair labor practices by (1) interfering with employees' exercise of their statutory rights, (2) refusing to provide complete and accurate bargaining information to the Union and (3) refusing to make itself available at reasonable times for the purpose of negotiating with the Union. Grower's answer stated negotiations had not been held due to scheduling conflicts on both sides and, moreover, a mandatory mediation had been set for May 24, 2013, by the parties and the mediator. The answer also asserted the affirmative defenses of waiver, estoppel, laches and the statute of limitations. The hearing on the unfair labor practices charges was set for July 25, 2013.

         Decertification Petition

         On May 24, 2013, a petition to decertify the Union was filed by the employee who earlier circulated the document expressing the desire to leave the Union. The same day, the acting regional director issued a notice of decision to block the decertification election.[3] About a week later, the employee requested the Board review the acting regional director's decision to block the election. Grower also filed a request for review.

         On June 13, 2013, the Board issued In re Arnaudo Brothers, LP (2013) 39 ALRB No. 9, affirming the acting regional director's decision to block the election requested in the decertification petition. Although the Board determined the acting regional director committed procedural error by failing to investigate and decide whether the decertification petition was valid before deciding whether to block the election, it ultimately concluded that the pending unfair labor practice complaint against Grower, alleging refusal to provide information and bargain, was sufficient to block the decertification election.

         Unfair Labor Practice Proceedings

         On June 21, 2013, the Board's general counsel issued a first amended complaint that added Arnaudo Bros., Inc. as a respondent and alleged the corporation and Arnaudo Bros., L.P. were alter egos of one another. The amended complaint asserted the same three causes of action as the original complaint.

         On July 22, 2013, three days before the scheduled unfair labor practice hearing, Grower filed a motion for summary judgment, supported by declarations from Steve Arnaudo and Carrol. The motion asserted the cause of action alleging Grower had unlawfully delayed bargaining was “preposterous” on its face and failed as a matter of law. It also asserted the other two causes of action alleging a failure to produce documents and information could not be established because Grower provided all the information necessary for the Union to bargain intelligently.

         The next day, the administrative law judge issued a one-sentence order denying the motion for summary judgment. At the subsequent hearing, the administrative law judge explained that the facts upon which the motion was based had not been established as true and the Board's general counsel was entitled to an opportunity to present evidence relating to those factual assertions.

         Initial Decisions

         On September 26, 2013, after two days of testimony on the unfair labor practice complaint and the filing of posthearing briefs, the administrative law judge issued his decision. The decision stated Grower had committed unfair labor practices by (1) refusing to agree to meet with the Union within a reasonable time after the Union requested bargaining and (2) failing to respond adequately to the Union's information request.

         Grower filed a dozen exceptions to the decision. Among other things, Grower argued the administrative law judge's refusal to allow evidence pertaining to the Union's three-decade absence denied Grower an opportunity to present the defense of the Union's disclaimer of interest.

         On April 4, 2014, the Board issued its decision in Arnaudo Brothers, LP and Arnaudo Brothers, Inc. (2014) 40 ALRB No. 3 (Arnaudo I). The decision addressed abandonment and disclaimer of interest, concluded disclaimer of interest was one way a union might forfeit its certification, and remanded to the administrative law judge with an order “to take evidence on the sole issue of whether a disclaimer of interest occurred.”

         Supplemental Hearing and Decision

         The administrative law judge held hearings relating to the alleged disclaimer of interest on October 14, 2014, and March 6, 2015. Steve Arnaudo testified as to his recollection of what was said at the last bargaining session with the Union, which he thought occurred on October 21, 1981. According to Arnaudo, the union negotiator asked him, “You don't like unions, do you?” Arnaudo responded, “Yeah, I'm okay with unions. I just don't like, particularly, your union … I have no problem with unions, except you.” The Union negotiator replied, “We don't like you either. We're through with you.” Arnaudo then told him, “Well, great, so I'm over with you.'”

         Dante Nomellini, the Grower's attorney at the last bargaining session, testified that he did not hear or recall any such statements. Luciano Crespo, the bargaining representative for the Union, testified he never spoke with Arnaudo, and did not make any such statements to anyone. He explained that after a cursory opening statement, he handed Nomellini a written proposal, which Nomellini took and said he would need time to review it with his client and would respond later. Nothing else was said and Nomellini and Arnaudo left the meeting. Crespo testified that he immediately returned to his office and wrote a letter to Nomellini, essentially thanking him for the meeting and ending with something like: “I'll await your response.” No response was received.

         On April 29, 2015, the administrative law judge issued his supplemental decision addressing (1) the Union's alleged disclaimer of interest and (2) make whole relief. As to the disclaimer of interest, the test applied was whether the Union's conduct was clear, unequivocal, not in bad faith, and not inconsistent with its subsequent conduct. Although the administrative law judge stated: “The testimony, and lack thereof, presents several potential credibility analyses, ” he sidestepped making credibility findings regarding the testimony about an exchange between Steve Arnaudo and the Union representative. Instead, the administrative law judge decided the statements recounted by Steve Arnaudo, if made, were not a clear and unambiguous disclaimer of interest in representing Grower's employees. This approach also allowed the administrative law judge to avoid deciding whether Crespo wrote or called Nomellini after the last session to request further negotiations. As to the Union's subsequent hiatus from bargaining, the administrative law judge stated:

         “Board, in its Decision herein, stated that mere inactivity does not amount to a disclaimer of representative status. The undersigned does not believe that such inactivity can be used to clari[f]y an otherwise ambiguous and equivocal statement, so as to create a disclaimer. Rather, evidence must be produced showing conduct, in itself, which clearly and unequivocally establishes such a disclaimer. Then, evidence of subsequent conduct inconsistent with the disclaimer may be considered to show it was unintentional or made in bad faith.” (Original boldface, fn. omitted.)

         Based on his analysis of the statement presumably made by the Union representative, and his view of the legal principles governing the role of subsequent conduct, the administrative law judge rejected the disclaimer defense and reiterated his conclusion that Grower's conduct violated subdivisions (a) and (e) of section 1153.

         The remedy formulated by the administrative law judge directed Grower to cease and desist from failing to provide information and from failing to bargain. He also directed Grower to make information available to the Union and to make the bargaining unit members whole for all losses in wages and fringe benefits they reasonably suffered as the result of Grower's refusal to bargain, for the period of September 27, 2012, to May 24, 2013 (i.e., the date of the first mandatory mediation session), plus interest.

         Grower and the Union filed exceptions to the administrative law judge's supplemental decision. Grower contended the Union's negotiator clearly disclaimed any interest in representing Grower's employees and, alternatively, the inactivity of the Union could be used to clarify any ambiguity in statements disclaiming the Union's interest. The Union contended Grower had prolonged the mandatory mediation process for two years and, therefore, the make whole period should end on the date the parties implemented the contract imposed pursuant to the mandatory mediation process.

         Board's Second Decision

         On September 10, 2015, the Board issued Arnaudo Brothers, LP and Arnaudo Brothers, Inc. (2015) 41 ALRB No. 6 (Arnaudo II) in which a majority affirmed the administrative law judge's ruling, findings and conclusions in full. The concurring and dissenting opinion of one Board member agreed with rejecting the claim that the Union disclaimed interest in representing the bargaining unit, agreed with awarding a make whole remedy, but provided additional grounds for why the make whole remedy was appropriate.

         The Board's decision adopted the recommended order and directed Grower to take the actions set forth in that order. The majority decision in Arnaudo II did not contain any independent analysis or findings relating to (1) the final conversation between representatives of the Union and Grower in 1981 or 1982 or (2) the make whole remedy.

         In September 2015, Grower filed a petition for review of the Board's decisions in Arnaudo I and Arnaudo II with this court. In July 2016, when the briefing was complete, we issued a writ of review. In August 2017, we issued our decision and the Supreme Court granted review. In March 2018, the Supreme Court ...

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