Legal Case Summary

Okay, we see you, please. And we'll call it next case of the day. That is Hallmark Phoenix, Assistant National Relations Board. Mr. Baines will give me your consent. You go ahead, Dr. Kahn. Thank you, Your Honor. The distinguished members of the panel may please the Court. We are here, and we are present in this Court because two federal agencies decided to disregard a balanced labor policy and focus their efforts, their combined efforts against a small, disadvantaged business. My client, HP3, is a small, disadvantaged business. It is experienced, since the beginning or since the infancy of this case, it is experienced arbitrariness at every turn. From the insourcing? Whether you are in a position to complain about arbitrariness is what I would like to find out. And that is, why did you get money from the government on the pretext of paying your employees' severance pay and then didn't pay you? That is what I want to know, and what is your reason for getting the money and not paying them? Your Honor, I don't think it was a pretext at all. This says that the, just looking at a note in the National Labor Relations Board, we note that the prior to the hearing, in this case, the respondents successfully gained reimbursement from the United States Air Force. The severance payments for the respondents unconditionally stated that it was obligated to make based on the same contract provisions relied on by the General Counsel and cited in the judge's decision. Yes, Your Honor. The Air Force is... Everyone here and here was, do not agree with the sound, are you a basis standard articulated, etc., but agree that under this standard, the respondents paid to make severance payments violated the act. Well, Your Honor, if you look back at the record respondents exhibits, sorry, Your Honor. Did you make an application and the government for payment for the severance? Not unconditionally, Your Honor. But did you make a statement? We did make an application. We did make an application and the Labor Union did not join HP3 in that effort. And did you pay it? Did it pay you? The government did pay us, but they said they were going to claim it back if a court or an arbitrator decided that it was not warranted. Did you pay it to them? Did you pay it to the government? Not the money. You said unconditionally, oh, wait, I agree, I owe it. Well, no, Your Honor. The government has said that, or the Air Force, the money is with HP3. It's with HP3. It's not paid to anybody. Wait, is it set aside as a security? I don't know that it's set aside

. It's been? I don't know that, Your Honor. But I do know... From my point of view, yes, Your Honor. ...I have read the briefs and the way I understand the record now, and you can change my mind, of course, is that that colors everything that you did or that you copied it had with HP3. A patina that you... that... that cast a doubt on every position you take. Well, I understand that, Your Honor. I understand how it looks, and I understand the court's position on that. But the court also has to understand the position that HP3 was in. The government, as this court knows, underlitten in other cases like that. Courts and arbitrators are the final arbiters of what a collective bargaining agreement says. The NLRB doesn't interpret agreements like this. And the Air Force was not going to consider it a binding decision on what the collective bargaining agreement meant until either an arbitrator or this court decided what the agreement meant. Well, Your Honor, that's not... HP3 has not said they're not going to pay it. They've just said that we don't know who's got the rightful claim to it. You are saying in this case that you do not owe it? Well, yes, Your Honor. If a... if a

... if a court or an arbitrator says... If... No, Your Honor, that's not correct. That's not correct. That's a misrepresentation of the record. The... Well, if we take a look at the letters that started this whole issue. The July 13th and the July 9th, 2012 letters that are GCX, 4 and 24. What those letters advise the union of was that we will... The government had... the Air Force has told HP3 that Severance Pay is not owed. They said that at that time. And we said we will... we will claim it if you will join us. And we will... we will pay it if it's paid, depending on what happens in the.

.. in the future. Now... What did you just say? Depending on what happens. Yes. No, well, not exactly, Your Honor, because... because what happened was an intervening thing. What is the intervening thing? The intervening thing was a charge and refusal to defer to arbitration. Because the arbitration was what was supposed to decide, whether this was a termination or a layoff, and whether it was owed, or whether HP3 was a successor contractor underneath the agreement. You already represented the government that it was owed. No, Your Honor. We said that we believe it's owed for these reasons. And we disagree with the Air Force's position. Even though you were saying you didn't know where you owed it or not. Well, Your Honor, there's... once the charge was filed, and they bypassed arbitration and the grievance procedure, that placed us in a totally... that placed HP3 in a totally different position. You should be able to answer the question. I'm sorry, Your Honor. I will try diligently to answer that. I understand, but... I don't know.

.. I'm completely lost as to how you can obtain the money from the government for this purpose. And then say, I'm going to determine hereafter whether I owe it. Because I don't... my understanding, correct me if I'm wrong, is that you represented the government that you did owe it. Now, maybe... did you say that the government... I might owe this, so pay us the $4,000, $3,400,000, and later the termination, whether it was owed or not. Well, what we represented to the government was that it was owed under the government's contract. That it was owed under the government's contract, that the government had to pay HP3 this, and that it was... that it may be owed depending on whether this is a termination or a layoff. Now, the government... The government said... Your Honor, the government said that to HP3. That's what started the entire thing. This claim was submitted and was pursued after the union argument, and it already filed its charge. So we were placed in a position of having to pursue it during the pendency of a charge. When the charge was made, the issue was whether this was supposed to go to arbitration or not. And it was..

. it was not whether this was paid or not. Now, it was fortuitously paid, but then the government immediately came back and said, if a court-worn arbitrator decides that this is a termination or a layoff, we want it back, and we will claim it back. Well, that would claim it back if what... Because you would take in the position that it was a termination. Yes, well, the government was taking the position that it was... The Air Force was taking the position that it was a termination and not a layoff. So therefore, it was not owed, and that is the letters that I was talking about earlier. The government was taking a position that it was not owed. When you asked for the money, they paid it to you. Well, they ultimately paid it after about a year and a half. But, you know, that was during the pendency and right prior to the trial. They agreed to pay it. They didn't pay it. They paid it just right prior to the trial in this case. But that was during the period that we were also trying to ask the NLRB to defer to arbitration so we could definitively address the issue. If the government paid you money for that purpose, they had no other obligation to pay it other than for that purpose, and they paid it for that condition. Why aren't you simply holding that property essentially sort of a form of private custodial length, holding that money for the benefit of these... The people to whom it is owed. Well, I honor there. As we've laid out in the brief, there are several competing claims to this money. There are other entities, there are banks, there are other things. Well, there are other court cases too. This is not the only one. Are the court cases involved in these employees? The work these employees did, yes, Your Honor. The work these employees did. The work they did, the work they did, the work they did. And you're going because the contract was not performed in the satisfaction of the work you're going to duck the employees that performed the work

. No, Your Honor, that's not what this is about. This is about whether the termination, this is a termination early off. This is a contract interpretation issue. Understand that, which is the holding the money, because there were contracts that involved the work that these employees did. Well, yes. That you're going to charge them for their faulty work on a contract that you did. No, Your Honor, we're not setting off the employees. We're just trying to get the... We have... From the beginning of the case, all HP3 tried to do was to enforce the collective bargaining agreement. All of it, not just part of it, not just the severance part, not just the vacation pay part, but also the grievance procedure part. At some point, labor policy got skewed in this country where we basically can disregard part of the collective bargaining agreement and can screw it against or even disregard it against a contractor. Here's what I understand is that the Labor Board, generally, would say, yes, arbitration can take it. If you agree, let it get to America. What you would do, we're contending, according to the briefs here, is that the statute of limitation barred all of these claims. No, Your Honor, that is false, too. That's a misrepresentation as well. If you look at respondents exhibit three, page T116 to 117. Exactly what we were going to do is laid out in those paragraphs. Were you going... Did you agree to litigate, followed the merits of the claims of the employees? Yes, Your Honor. The only thing that we did not agree to litigate... Well, because they had their own agenda and didn't want to defer it. They wanted to pursue this as a labor charge rather than defer it to arbitration. The board did

. That is what we're saying as arbitraries because they should have deferred this to arbitration so it could be definitively decided. Then the Air Force would not have the argument that no court or board has decided the issue. Therefore, there's no pending claim. You're not raising the statute of limitation with respect to any of these claims. The only issue that we had raised is laid out in these paragraphs. I can read it. I'm not going to read it, Your Honor. All we said was that we had sent those letters saying that we can't pay the... The HP3 cannot pay this until the government pays. The Air Force is objecting to this and saying that it's a termination not a layoff. If we agree to defer this to an arbitrator, we can address all these substantive issues. Whether it's a termination, whether it's a layoff, whether HP3 was a successor and interest... Before you got your money? Yes, Your Honor. We agreed to defer all these issues. The only issue that HP3 said that it would not waive is that the government that it couldn't pay until the government... The Air Force paid it. That is the only issue. Initially, the NLRB said yes. Then, after the union complained, it withdrew the deferral and proceeded with the charge. But here we are five years later. We're sitting here in the court having to argue because the Air Force needs either a court or an arbitrator's decision to let go of its claim on HP3. If we had just agreed to defer this to arbitration at the time and decide those issues of whether it was a termination or a layoff or whether HP3 was a successor and interest... Then we would not be here. I'm not asking a lot of your time. I'm going to give you some more time to make your argument

. I want you to make all the points that you can like you have to make. Okay, Your Honor. For a couple of minutes. Yes, Your Honor. I'm in a rough time. No problem, Your Honor. I understand. I know it is difficult to wrap the court's head around. But this is what happens to a small business when two agencies combine to go after them. We have one agency saying that has a contract with HP3 that's saying, we don't know this. This is a termination, not a layoff. We have another agency saying, you do owe it. And here's HP3 in the middle trying to figure out what the best approach to this is. This case is not about the interpretation of the contract per se. This is a labor case. This is about whether what HP3 did prior to the charge was an unfair labor practice or not. And then, you know, and so when we look at what they did, all they did was ask for a determination, said, we're going to rest on the grievance procedure itself with respect to whether or not HP3 will pay it before the, before the Air Force pays it as they're entitled to do. And so when we look at whether this case, the substance of this case, we look at the terms. Now, whether or not this is a termination or a layoff or whether or not HP3 was a successor in interest is decided not only by what the union said it was, but also by what happened in 2011. 2011 is the part of the record that is missing. There is nothing from 2011 except what the union was allowed to say about it. What was not allowed to be said was that HP3 was asked for a proposal from the government at that time to decide whether it needed to outsource the contract and evaluate the wages to determine whether it was in the best interest of the government to proceed with HP3 or insource it. In that sense, there was a proposal at the time and there was a bid. And HP3 went to the union and asked them for to reduce their wages to compete with what the government wages were. Now, you won't find this in the record, Your Honor. The only reference to it, you'll find in Respondents Exhibit 3. And the reason you won't find this in the record and the reason why it's so important is because the judge below did not allow any testimony with respect to anything that occurred in 2011. And so here we have records for that, or what you would show if you have a louder. It's laid out and exhibit Respondents Exhibit 3 and it's also laid out in the exceptions to the court asked for a complete record. And there's a September 8th document that was added to the record. Page 4 of that document talks about page 4 through 5 of that document talks about what was that a rebid did take place and how that occurred. And that's exception 1 in the document, document 513186848, page 6, filed on September 9th, 2015. But those types of things, whether this is a, whether HP3 had a sound argument with a basis that it was a termination and not a layoff, that interpretation came from a government agency

. And HP3 just simply forwarding it. If that wasn't a sound argument basis, then it's the Air Force that was a fault for that. If it was, if HP3 was not the successor contractor and it was not a termation or layoff, then all the major issues in this case, the severance and the vacation pay, go away. They're not, they are not, because the carryover hours that were not paid. And also the term- What are carryover hours? Carryover hours, your honor, are mentioned in the agreement. They are the hours that are carry forward from year to year. And they're left over hours, like vacation hours that are accrued. There's a maximum in carryover, but there's no carryover at all. And the, in the event that there is a, there is a, that HP3 is not the successful contractor on a rebid. And so that was one of the crux, that was one of the main arguments. And one of the things that HP3... What was the successor argument? Is the language is kind of awkward? Well, it's, it might be awkward, your honor, but in that context, we go back to M&G polymers. We don't construe whatever, and accept whatever the union says. We have to construe things in the context of contract principles. And so CBAs, you know, we look at M&G polymers and DR Horton. Those cases all talk about what we have to, what, you know, that there's no conflict between labor policy and the Arvitation Act. There's no conflict between contract principles and collective bargaining agreements. There are to be construed in a context of what happened. Looking at exactly, you know, applying those facts to the law. The problem with the judge below is that he did not allow the facts of that situation to be put into the record. So that, so we were lost in terms of being able to prove that argument. That was one of the major issues. And I'll reserve the rest of my time, your honor. I'm going to choose to save some time for a bottle. Thank you, Your Honor. Mr. Grotto, we'll include represent national relations. May please the court. My name is James Senguella for the National Labor Relations Board. I would like to begin by correcting a couple of misstatements made by opposing counsel. First, I will go to a letter that Hallmark Phoenix three sent to the Air Force on December 11, 2012

. This is Respondents Exhibit 11. And I'm just going to read from it in this regard. And I quote, once the US Air Force made official that it would not exercise the fourth option year of the contract in July 2012, HP three became obligated to pay severance at contract end to non-exempt employees as fringe benefits consistent with the provisions and conditions of each collective bargaining agreement. Additionally, the company did not ever give assurances that the merits of this dispute of this contract interpretation dispute is the whether or not there had been an unlawful midterm contract modification to the board. Those were not given to the board's regional director. Those could have been given before the administrative law judge and they weren't. Those could have been given again before exceptions to the board and they weren't. What do you do with the statement that the ALJ wouldn't allow any evidence as to 2011? The company has never demonstrated how that was exactly relevant to interpreting the party's agreement. There's no reference whatsoever in I have the TWU or the IOTC CVA's about what constitutes the rebitting process, what role and what distinction there is between insourcing and outsourcing. What do you do with the response exhibit three? Did that explain why that information was relevant and should have been heard? The board concluded that that information wasn't based on that response and that response was deficient. I think the crux of the matter is, as Judge Jolly opened with, is you can't have a sound arguable basis if you're telling people that the contractual terms that mean one thing, don't mean one thing and then you turn around and say to another party that no, in fact these actually do mean what we're saying that they don't mean over here. That's exactly what the company's done here. Isn't that a question that's in dispute that therefore the ALJ should have at least considered? Maybe the ALJ would have rejected the company's position but I don't understand the justification for not allowing the information to be received and considered. I believe the lack of justification falls from the company which is that with looking within the four corners of the two agreements, it's unclear what relevance that information had. I realize the company has stated that it was very important to their interpretation of the agreement but the... What has the information been caused and what is the year 2011? It's kind of unclear as the company's council said forth that's not in the record. There is some references to that information in Prespondence Exhibit 3 but it doesn't really explain how or why the company was privileged to interpret either the Severance Pay provisions and either the collective bargaining agreements to not obligate them to O Severance Pay in the event of the Air Force En sourcing the work. What year 2011 is that the year that the contract terminated or what is the importance of 2011? How does that figure out? In 2011 the company was contacted by the Air Force and asked as the company's council represented for its position on whether or not cost savings could be had on if it insourced the work. Both the unions and the company worked together to respond to that and ultimately the Air Force decided that there were no cost benefits. The Air Force then the following year in 2012 decided instead that it would not renew the VOMS contract and would insource the work. What does Exhibit 3, what subject matter does it reference specifically? Again it's somewhat unclear because Exhibit 3 is a chain of emails between the company and the unions. The company was directed about two things. One about whether or not the company would allow the merits of this dispute to reach an arbitrator and what exactly it meant by waiving certain timeliness defenses. Two, the company's view that the union should have been more involved in the... It's a bit to try and stop the Air Force from insourcing this work. The only... The only knowledge that I have is what is communicated in the company's brief and supportive exceptions to the board that we live with the court on September 8th. When they offered this at the trial I guess before the administering of law judge. And when they offered it there had to be some sort of argument in the record as to why it was relevant and why they were offering it. Yes and I have reviewed the record I'm kind of unclear as to what that argument was. There seems to be a logical step missing from the representations that the company made to the board as to how the events in 2011 impact the interpretation of the collective bargaining agreement in 2012. And it's unclear to me what that connection is. It was apparently... Well, is the year that the contract was terminated? Yes. And the information that it was a contract, a three-year contract? It was a four-year contract. I'm talking about the CBC collecting money. As I understand the VOMS contract with the Air Force it was a two-year contract with two additional option years, 2011 and 2012. And the Air Force ultimately decided to exercise the option in 2011 to renew it for the third year. The collective bargaining agreement was obviously the term of the... Oh, period. The collective bargaining agreement was adopted. The collective bargaining agreements have slightly different terms. The agreement and effect between the company and TWU ran from October 2010 through September 30, 2014. Was there any argument that the correspondence they were offered had any... ...modification of the contract between the union and the company? No. It was only the matter of their work that they were offered. Yes, as far as I'm aware. And... Right now, when the Administrative Law Judge denied the introduction of the evidence, did it give its reasons for denied? On the record? I don't actually know the answer to that, Your Honor

. When they offered this at the trial I guess before the administering of law judge. And when they offered it there had to be some sort of argument in the record as to why it was relevant and why they were offering it. Yes and I have reviewed the record I'm kind of unclear as to what that argument was. There seems to be a logical step missing from the representations that the company made to the board as to how the events in 2011 impact the interpretation of the collective bargaining agreement in 2012. And it's unclear to me what that connection is. It was apparently... Well, is the year that the contract was terminated? Yes. And the information that it was a contract, a three-year contract? It was a four-year contract. I'm talking about the CBC collecting money. As I understand the VOMS contract with the Air Force it was a two-year contract with two additional option years, 2011 and 2012. And the Air Force ultimately decided to exercise the option in 2011 to renew it for the third year. The collective bargaining agreement was obviously the term of the... Oh, period. The collective bargaining agreement was adopted. The collective bargaining agreements have slightly different terms. The agreement and effect between the company and TWU ran from October 2010 through September 30, 2014. Was there any argument that the correspondence they were offered had any... ...modification of the contract between the union and the company? No. It was only the matter of their work that they were offered. Yes, as far as I'm aware. And... Right now, when the Administrative Law Judge denied the introduction of the evidence, did it give its reasons for denied? On the record? I don't actually know the answer to that, Your Honor. I do know that the board did review the company's arguments in that regard on exceptions and upheld the Administrative Law Judge's decision in that respect. All right, and did the board decision fully explain itself? I mean, is the why it was excluding the evidence from further consideration? No, and I think part of that is because there was never really explained what the argument was. Are the briefs before the board part of the record here? The company's brief before the board is not part of the record. However, we did lodge it with the court of the courts request. However, we did lodge it with the court of the courts request. The company's brief to the board. You gave it to us? Yes. We do have it though, it's not part of the record. Yes. You have to my knowledge, everything either in the record or in extra record material such as the company's exceptions brief. All the company's arguments in regard to what correlation there possibly could be between the discussions with the Air Force in 2011 and the, and these midterm contract modifications. And I think importantly to note is that the company never accepted to the administrative law judges finding that logically the Air Force could not be a successor contractor to itself. And in that regard, these arguments in terms of how the decision to insource makes the Air Force's successor contractor under the bargaining agreement was not presented to the board. And as such, at least with that regard, the board is entitled to summary enforcement of that portion of its order. What do you do with the argument that's made that it was the board's intervention precluded the parties from going to arbitration and that arbitration would have been a desirable way of proceeding at that point rather than having the board intervene? The board would have under call your insulated wire, which is the controlling precedent in this, in this situation. The board would have been happy to defer this matter. If three requirements were met, one, a stable bargaining relationship existed, two, the, the party in favor of arbitration remains willing to arbitrate the substance of the issue. And three, determination of whether the contract and its meeting are central to the dispute. And it's with element two that the board had issued. Because as the, to this date, the company has never stated that it would waive all timeliness except defenses. And that is that waiver of procedural defenses is what the board requires before it will decline to exert its authority under Section 9A of the Act to remedy unfair labor practice. And that's because it says that he agreed in all respects except one minor respect as I remember. That's incorrect. Reading from the, I'd like to take a moment to actually read from the exhibit that Council referred to. And I quote from the companies November 27, 2012 email to one of, to one of the union presidents. And I quote, we did not agree to waive all timeliness issues. We agreed to allow the grievance and arbitration to proceed for filing purposes. But whether other aspects of timeliness affect entitlement or the timing of payment was not waived. In other words, based on that and based on the fact that the company has never recanted that hedging of its bets as to what timeliness defenses it would waive, the board couldn't defer this. What if the company, I don't know what the company's position would be, but what if the company were to represent in a sufficient way that it would waive all timeliness defenses then what would the board do at that point or where would we be? If that had happened today, I'm not sure what we do with that. If that could have happened before the administrative law judge, that could have happened after that email was sent, a clarification or recanting that they actually did mean to waive all timeliness defenses, that could have even happened on a motion on the company's exceptions to the board that never happened. And it was the company's burden to make those assurances at the board that the alleged unfair labor practice would actually get to an arbitrator. But I don't understand really that you said they had to waive all timeliness issues because they could surely raise timeliness issues before the board in the board's interpretation of the collective bargaining

. I do know that the board did review the company's arguments in that regard on exceptions and upheld the Administrative Law Judge's decision in that respect. All right, and did the board decision fully explain itself? I mean, is the why it was excluding the evidence from further consideration? No, and I think part of that is because there was never really explained what the argument was. Are the briefs before the board part of the record here? The company's brief before the board is not part of the record. However, we did lodge it with the court of the courts request. However, we did lodge it with the court of the courts request. The company's brief to the board. You gave it to us? Yes. We do have it though, it's not part of the record. Yes. You have to my knowledge, everything either in the record or in extra record material such as the company's exceptions brief. All the company's arguments in regard to what correlation there possibly could be between the discussions with the Air Force in 2011 and the, and these midterm contract modifications. And I think importantly to note is that the company never accepted to the administrative law judges finding that logically the Air Force could not be a successor contractor to itself. And in that regard, these arguments in terms of how the decision to insource makes the Air Force's successor contractor under the bargaining agreement was not presented to the board. And as such, at least with that regard, the board is entitled to summary enforcement of that portion of its order. What do you do with the argument that's made that it was the board's intervention precluded the parties from going to arbitration and that arbitration would have been a desirable way of proceeding at that point rather than having the board intervene? The board would have under call your insulated wire, which is the controlling precedent in this, in this situation. The board would have been happy to defer this matter. If three requirements were met, one, a stable bargaining relationship existed, two, the, the party in favor of arbitration remains willing to arbitrate the substance of the issue. And three, determination of whether the contract and its meeting are central to the dispute. And it's with element two that the board had issued. Because as the, to this date, the company has never stated that it would waive all timeliness except defenses. And that is that waiver of procedural defenses is what the board requires before it will decline to exert its authority under Section 9A of the Act to remedy unfair labor practice. And that's because it says that he agreed in all respects except one minor respect as I remember. That's incorrect. Reading from the, I'd like to take a moment to actually read from the exhibit that Council referred to. And I quote from the companies November 27, 2012 email to one of, to one of the union presidents. And I quote, we did not agree to waive all timeliness issues. We agreed to allow the grievance and arbitration to proceed for filing purposes. But whether other aspects of timeliness affect entitlement or the timing of payment was not waived. In other words, based on that and based on the fact that the company has never recanted that hedging of its bets as to what timeliness defenses it would waive, the board couldn't defer this. What if the company, I don't know what the company's position would be, but what if the company were to represent in a sufficient way that it would waive all timeliness defenses then what would the board do at that point or where would we be? If that had happened today, I'm not sure what we do with that. If that could have happened before the administrative law judge, that could have happened after that email was sent, a clarification or recanting that they actually did mean to waive all timeliness defenses, that could have even happened on a motion on the company's exceptions to the board that never happened. And it was the company's burden to make those assurances at the board that the alleged unfair labor practice would actually get to an arbitrator. But I don't understand really that you said they had to waive all timeliness issues because they could surely raise timeliness issues before the board in the board's interpretation of the collective bargaining. I respect that you just agree with that judge, because to the extent that there's a procedural timeliness issue, that must be waived and the board won't consider that the only procedural timeliness issues that the board will consider is within section 10b of the act, whether or not the charge was timely filed. If the board would consider any sort of reasonable argument, the argument has supported by a reasonable argument on both sides, then the board backs off and doesn't do anything about it, it's not their labor rate, it's his own sand law. And so if they had a genuine good faith timeliness argument that the board cannot consider this because under the contract they were required to file agreements on such and such a date, then you could not accuse the board of being in bad faith by raising a procedural defense that was provided for the end of collective bargaining agreement. And you've got to have bad faith in order for them to act in any way if they don't find bad faith. They can't act. In bad faith, Mark. Yes, the allegation here, to first respond to that, I think arguably that is correct, but that's not this case. This isn't a case where the severance pay provisions, either the severance pay provisions or the vacation pay provisions, shouldn't or wouldn't apply because of some procedural timeliness deficiency within the agreement. And in fact, the company did in fact represent to the U.S. Air Force, that in fact they all did apply. So I do think that while that might be correct in another case, potentially that's not this case. Well, I mean, it seems to me that the board, what they said is we will not waive time on this as far as arbitrage is concerned. We will say this case is arbitrable. Give it to the arbitrage. And when we get to the arbitrage, we are natural to go into raising the kind of divances that are about it under a good faith negotiated collective bargaining agreement between us and the union. The union can raise them, we raise them as so. And in fact, they would have to do it before the board, it seems to me. I see what you're talking about, Judge Jellie. I agree and I still think even with regard to the first issue, with regard to whether this should have even been deferred to arbitration, is there never was this plain commitment from the company to permit this to go on the substance of the issue. What time on this issue is are you talking about? You seem to be talking about two categories of time on this issue. One internal to the CBI and some other extraneous limitations. What are you talking about? Well, you're on it that's... What's the non-waver provision? Well, you're on it. I think that's the point is I don't know. And the company has never explained what it meant by we're willing to waive certain timeliness issues. And when to this day, they still haven't explained that. And it's... They have waived the major time on this issue

. I respect that you just agree with that judge, because to the extent that there's a procedural timeliness issue, that must be waived and the board won't consider that the only procedural timeliness issues that the board will consider is within section 10b of the act, whether or not the charge was timely filed. If the board would consider any sort of reasonable argument, the argument has supported by a reasonable argument on both sides, then the board backs off and doesn't do anything about it, it's not their labor rate, it's his own sand law. And so if they had a genuine good faith timeliness argument that the board cannot consider this because under the contract they were required to file agreements on such and such a date, then you could not accuse the board of being in bad faith by raising a procedural defense that was provided for the end of collective bargaining agreement. And you've got to have bad faith in order for them to act in any way if they don't find bad faith. They can't act. In bad faith, Mark. Yes, the allegation here, to first respond to that, I think arguably that is correct, but that's not this case. This isn't a case where the severance pay provisions, either the severance pay provisions or the vacation pay provisions, shouldn't or wouldn't apply because of some procedural timeliness deficiency within the agreement. And in fact, the company did in fact represent to the U.S. Air Force, that in fact they all did apply. So I do think that while that might be correct in another case, potentially that's not this case. Well, I mean, it seems to me that the board, what they said is we will not waive time on this as far as arbitrage is concerned. We will say this case is arbitrable. Give it to the arbitrage. And when we get to the arbitrage, we are natural to go into raising the kind of divances that are about it under a good faith negotiated collective bargaining agreement between us and the union. The union can raise them, we raise them as so. And in fact, they would have to do it before the board, it seems to me. I see what you're talking about, Judge Jellie. I agree and I still think even with regard to the first issue, with regard to whether this should have even been deferred to arbitration, is there never was this plain commitment from the company to permit this to go on the substance of the issue. What time on this issue is are you talking about? You seem to be talking about two categories of time on this issue. One internal to the CBI and some other extraneous limitations. What are you talking about? Well, you're on it that's... What's the non-waver provision? Well, you're on it. I think that's the point is I don't know. And the company has never explained what it meant by we're willing to waive certain timeliness issues. And when to this day, they still haven't explained that. And it's... They have waived the major time on this issue. They've said, look, we'll put all this before an arbitration. And when we get before the arbitration, we're going to raise the statute of limitations. He may have may not agree with us. We're not waiving our arguments that we have under the CBC. And we are conceding that the arbitration has the authority to decide to address all of the issues raised in the collective bargaining agreement. But that's not quite what the company said here. Why is it? And what did they say other than that? They led it before we waived it before... They said we'll let the arbitration decide the case. That's essential what they said. They respectfully dodged Ali, I disagree. They merely said that they had processed the grievance. They didn't make clear what defenses they'd be raising in front of the arbitrator and whether or not they would be purely procedural based on the grievance and arbitration provisions. Any exceptions that were made to preserve the point. How did they preserve this point? I generally, when determining whether a party is waived a... Or properly accepted to an issue under Section 10E, we generally tend to err on the side of caution. And from reading the company's exceptions to the board, we did feel that the company had put the board on adequate notice that it was challenging the administrative law judge's decision not to defer this matter to arbitration. And in that regard, the company could have clarified some of these wishy-washy or unclear statements as to which or whatever timeliness decisions it would be. If we decide that the employee agreed to have the arbitrator decide this case and we will raise and union can raise any sort of defenses that are available under the collective bargaining agreement and present them to the arbitrator decide. Then we say, do we say, the labor board therefore abused its discretion in exercising jurisdiction over this collective bargaining agreement and we deny enforcement. I don't believe so because the board gets a fair amount of deference in terms of its decision not to defer. Right or wrong. I believe that the proper course of action for the court in that situation to be to remand it for the board to defer to arbitration to make sure that this did in fact go to an arbitration and that the underlying alleged lawful contract was addressed by the arbitrator. Remanded to the board not for arbitration but to clarify exactly what the way where non-way where it is and if they are still insisting on some impromissible way where that's one thing. But I know the threshold question would be clarified what it's waived not waived. Yes, I believe that's correct but I don't believe that's necessary in this case because the burden is on the party seeking deferral to demonstrate its willingness to arbitrate. And even if the party was arguably willing to arbitrate which I don't think the record evidence supports in this case, the boards not bound statutorily to yield to other methods of dispute adjustment under Section 10A of the Act. It does abuse its discretion under its own rules if under the correct circumstances it assumes jurisdiction over cases, crockling, or virtual. That's correct Judge Jolly but I can't stress enough that there is devoid in this record. The only thing I would add to that is that's said earlier

. They've said, look, we'll put all this before an arbitration. And when we get before the arbitration, we're going to raise the statute of limitations. He may have may not agree with us. We're not waiving our arguments that we have under the CBC. And we are conceding that the arbitration has the authority to decide to address all of the issues raised in the collective bargaining agreement. But that's not quite what the company said here. Why is it? And what did they say other than that? They led it before we waived it before... They said we'll let the arbitration decide the case. That's essential what they said. They respectfully dodged Ali, I disagree. They merely said that they had processed the grievance. They didn't make clear what defenses they'd be raising in front of the arbitrator and whether or not they would be purely procedural based on the grievance and arbitration provisions. Any exceptions that were made to preserve the point. How did they preserve this point? I generally, when determining whether a party is waived a... Or properly accepted to an issue under Section 10E, we generally tend to err on the side of caution. And from reading the company's exceptions to the board, we did feel that the company had put the board on adequate notice that it was challenging the administrative law judge's decision not to defer this matter to arbitration. And in that regard, the company could have clarified some of these wishy-washy or unclear statements as to which or whatever timeliness decisions it would be. If we decide that the employee agreed to have the arbitrator decide this case and we will raise and union can raise any sort of defenses that are available under the collective bargaining agreement and present them to the arbitrator decide. Then we say, do we say, the labor board therefore abused its discretion in exercising jurisdiction over this collective bargaining agreement and we deny enforcement. I don't believe so because the board gets a fair amount of deference in terms of its decision not to defer. Right or wrong. I believe that the proper course of action for the court in that situation to be to remand it for the board to defer to arbitration to make sure that this did in fact go to an arbitration and that the underlying alleged lawful contract was addressed by the arbitrator. Remanded to the board not for arbitration but to clarify exactly what the way where non-way where it is and if they are still insisting on some impromissible way where that's one thing. But I know the threshold question would be clarified what it's waived not waived. Yes, I believe that's correct but I don't believe that's necessary in this case because the burden is on the party seeking deferral to demonstrate its willingness to arbitrate. And even if the party was arguably willing to arbitrate which I don't think the record evidence supports in this case, the boards not bound statutorily to yield to other methods of dispute adjustment under Section 10A of the Act. It does abuse its discretion under its own rules if under the correct circumstances it assumes jurisdiction over cases, crockling, or virtual. That's correct Judge Jolly but I can't stress enough that there is devoid in this record. The only thing I would add to that is that's said earlier. They're taking this money from the government under false pretenses which seem to me false pretenses and still I mean I'll consider the arguments are made here but it's highly questionable. That may call everything because one of the reasons I understand it that the board has to be satisfied with is that the case is going to be arbitrarily in good faith. And if somebody is taking money we may ultimately determine is taking in bad faith and it's not given it to the employees to whom they made the representation it was going to. Undamines any kind of good faith or assurance that the labor board not have that proper procedure is going to be false. That I think is absolutely the concern in this case your honor. Additionally I would add that part of the board's call your inquiry generally and within the board's call your policy which has been at least in regards to these sort of cases unchanged since 1973 is that even if a party satisfactorily expresses a willingness to arbitrate. The board will not defer if the party's interpretation of the contract is not based under a good faith defensible interpretation of the agreement. The idea is that the initial prerequisite is that the parties themselves have an ongoing relationship and they're acting in good faith they have but they have a dispute and it's a resolvable arbitration. So the predicate question is the one that Judge Jolly posed in. Yes. Does the board take the position that the company took money in bad faith with no intention of paying it or instead is it the board's position that the company just took the money and it was undecided at that point whether it should be paid. The board takes no position on that because the fact that the company was paid by the Air Force is irrelevant as to whether or not there was a midterm contract modification. The fact that the company lobbied the Air Force under an interpretation of the contract that had both these severance pay and vacation pay provisions applying is the critical inquiry. Where the money, if this court enforces the board's order in full, where the money ultimately comes from is the company's problem. And with regards to if the company took this money as you suggest in bad faith from the Air Force and doesn't have it available to pay. I'm not suggesting an enforced order but I'm not suggesting that that's not our business. No, the board is not taking a position on bad faith. Yes. But we are taking a position that the representation that it needed that money to to satisfy these claims does constitute a lack of a sound arguable basis. The board did make a reference and put note three that we know prior to the hearing of this issue, the Department of Justice and Reimbursement in the United States Air Force is a very famous and a very unspoken statement that was obligated to make based on the same contract provisions or a lot owned by the General Counsel and cited by the judge's decision. Yes, I think that's the only reference that the board made. Yes, and that's that that as I read the board's decision is part of their part of the boards rationale that there was no sound arguable basis. Yes, exactly. I see that I'm out of time if there are no further questions. Thank you, Your Honours. Thank you, Mr. Row. Thanks. Thank you, Your Honour. I can address a few points here. First of all, in making a claim to the government under the Federal Acquisition Regulation, it is required that things be stated as definitively as they were in that claim. That doesn't mean that that abandones all rights under the collective bargaining agreement. It simply means that with respect to the government in order to get the money from them, HP3 had to assert it strongly or they weren't going to grant it at all

. They're taking this money from the government under false pretenses which seem to me false pretenses and still I mean I'll consider the arguments are made here but it's highly questionable. That may call everything because one of the reasons I understand it that the board has to be satisfied with is that the case is going to be arbitrarily in good faith. And if somebody is taking money we may ultimately determine is taking in bad faith and it's not given it to the employees to whom they made the representation it was going to. Undamines any kind of good faith or assurance that the labor board not have that proper procedure is going to be false. That I think is absolutely the concern in this case your honor. Additionally I would add that part of the board's call your inquiry generally and within the board's call your policy which has been at least in regards to these sort of cases unchanged since 1973 is that even if a party satisfactorily expresses a willingness to arbitrate. The board will not defer if the party's interpretation of the contract is not based under a good faith defensible interpretation of the agreement. The idea is that the initial prerequisite is that the parties themselves have an ongoing relationship and they're acting in good faith they have but they have a dispute and it's a resolvable arbitration. So the predicate question is the one that Judge Jolly posed in. Yes. Does the board take the position that the company took money in bad faith with no intention of paying it or instead is it the board's position that the company just took the money and it was undecided at that point whether it should be paid. The board takes no position on that because the fact that the company was paid by the Air Force is irrelevant as to whether or not there was a midterm contract modification. The fact that the company lobbied the Air Force under an interpretation of the contract that had both these severance pay and vacation pay provisions applying is the critical inquiry. Where the money, if this court enforces the board's order in full, where the money ultimately comes from is the company's problem. And with regards to if the company took this money as you suggest in bad faith from the Air Force and doesn't have it available to pay. I'm not suggesting an enforced order but I'm not suggesting that that's not our business. No, the board is not taking a position on bad faith. Yes. But we are taking a position that the representation that it needed that money to to satisfy these claims does constitute a lack of a sound arguable basis. The board did make a reference and put note three that we know prior to the hearing of this issue, the Department of Justice and Reimbursement in the United States Air Force is a very famous and a very unspoken statement that was obligated to make based on the same contract provisions or a lot owned by the General Counsel and cited by the judge's decision. Yes, I think that's the only reference that the board made. Yes, and that's that that as I read the board's decision is part of their part of the boards rationale that there was no sound arguable basis. Yes, exactly. I see that I'm out of time if there are no further questions. Thank you, Your Honours. Thank you, Mr. Row. Thanks. Thank you, Your Honour. I can address a few points here. First of all, in making a claim to the government under the Federal Acquisition Regulation, it is required that things be stated as definitively as they were in that claim. That doesn't mean that that abandones all rights under the collective bargaining agreement. It simply means that with respect to the government in order to get the money from them, HP3 had to assert it strongly or they weren't going to grant it at all. Now, let's go back for a minute and they still to this day are saying that they will claim it back if a quarter arbitrator determines otherwise. So those things, that's why it hasn't been paid out. It's not because the it's not because and there's no proof otherwise. The only proof in the record of why HP3 has not paid this out is because there's a competing claim between the NLRB and the United States Air Force. And so. I don't know that Your Honour, it's just not part of the record. Let us the council and say, Craig is that money. You still have it. And if you have to come back and say no, we've spent that money and have it known further. When you obtained it on the pretense, it was on the reason that it was for these employees. Where does that put your kids? I think that puts it in the same place it is now, Your Honour, which is deserving of remand. All these things were not addressed by the board. This is an unfair labor practice case Your Honour. This is not about whether they breach the collective Barney agreement. The Senate back to the board, then I found that it was false pretense. It took the money that you spent pay all other people related to employees. And we found that this is bad faith and you cannot rely upon the good faith, barging up the company and kind of a state out of order. At least those things have to be addressed. I don't think the court can make those factual determinations now, Your Honour, under SEC versus Chenery. So I think that those things, because the board didn't address those things and didn't consider other important aspects of the case, I think we're left with an incomplete record. So you're suggesting that it be remanded to be boarded for further clarification as it may come out of these organizations? Well, I think it should be remanded to the board for deferral to arbitration. Now on those issues, before we run out of time, let me address those. First of all, sorry, I have a question of arbitration. Why isn't the board's word sustainable based on the record that you unequivocally sold the United States government that you were alive or made a strong statement in order to get the money? And that in of itself is your interpretation of the contract which is not the CBA which is there and that alone is sufficient basis for that. Your Honour, because this is not a collective bargaining case, this is an unfair labor practice case. The question is whether HP3 acted unreasonably not whether it owes the money. That's not the question. When we look at this, let me understand what you're asking. Okay, Your Honour. You're on, we did raise this in the brief in the exceptions to the to the board below on page 12 document 513186848. Raised the issue of not deferring this to arbitration and that arbitration was the proper form. When we look at what we waived and I want to make sure this is clear in the record. The only thing that HP3 did not agree to waive in terms of tiling this was the timing of the payment

. Now, let's go back for a minute and they still to this day are saying that they will claim it back if a quarter arbitrator determines otherwise. So those things, that's why it hasn't been paid out. It's not because the it's not because and there's no proof otherwise. The only proof in the record of why HP3 has not paid this out is because there's a competing claim between the NLRB and the United States Air Force. And so. I don't know that Your Honour, it's just not part of the record. Let us the council and say, Craig is that money. You still have it. And if you have to come back and say no, we've spent that money and have it known further. When you obtained it on the pretense, it was on the reason that it was for these employees. Where does that put your kids? I think that puts it in the same place it is now, Your Honour, which is deserving of remand. All these things were not addressed by the board. This is an unfair labor practice case Your Honour. This is not about whether they breach the collective Barney agreement. The Senate back to the board, then I found that it was false pretense. It took the money that you spent pay all other people related to employees. And we found that this is bad faith and you cannot rely upon the good faith, barging up the company and kind of a state out of order. At least those things have to be addressed. I don't think the court can make those factual determinations now, Your Honour, under SEC versus Chenery. So I think that those things, because the board didn't address those things and didn't consider other important aspects of the case, I think we're left with an incomplete record. So you're suggesting that it be remanded to be boarded for further clarification as it may come out of these organizations? Well, I think it should be remanded to the board for deferral to arbitration. Now on those issues, before we run out of time, let me address those. First of all, sorry, I have a question of arbitration. Why isn't the board's word sustainable based on the record that you unequivocally sold the United States government that you were alive or made a strong statement in order to get the money? And that in of itself is your interpretation of the contract which is not the CBA which is there and that alone is sufficient basis for that. Your Honour, because this is not a collective bargaining case, this is an unfair labor practice case. The question is whether HP3 acted unreasonably not whether it owes the money. That's not the question. When we look at this, let me understand what you're asking. Okay, Your Honour. You're on, we did raise this in the brief in the exceptions to the to the board below on page 12 document 513186848. Raised the issue of not deferring this to arbitration and that arbitration was the proper form. When we look at what we waived and I want to make sure this is clear in the record. The only thing that HP3 did not agree to waive in terms of tiling this was the timing of the payment. We agreed to defer arbitration and if it had been deferred to arbitration at that time, the only thing that and it's specifically in there at t116 on respondents or respondents exhibit three of the record, you can read it yourself. It specifically says that the only thing that the that HP3 did not agree to waive and let it proceed into arbitration was the timing of the payment. In other words, once the government paid it, whether you know that it was a prerequisite for the government to pay it first was the only thing that that HP3 did not agree to waive. That was before the government paid you. Right. And it was also at that time we were seeking deferral the idea. Yes. Always saying is that if there's an award against us, we are not effective say we're not going to pay it until the government pays us. Yes. And that was and that's fully appropriate under the contract. The contract itself had that 45 day rule that if you didn't object to that those those letters, which were issued in July of 2012, they didn't file any charges or grievances. We're all for that explanation at all to the board. Yes, Your Honor, we offered all of this and all of this is in our exceptions to the brief. You just stated it was a clarification and effort to clarify the waiver. And what you've added here is that it's a very specific waiver as to the receipt of addressing your condition. The receipt from the payment and so I never that you've never stated that before in this argument and my question is did you tell that did you tell that in our the corporate board people? Yes, Your Honor, the in your exceptions I take it in LRB then LRB's statement earlier that that was just correspondence between the union and HP3 is not correct. Ms. Pabone was copied on that correspondence. Ms. Pabone, the NLRB person that was deciding whether to defer it was copied on that correspondence. That for being copied on it is at T1 14. Sorry, Your Honor. Your correspondence referent to it's what you just said. Yes, Your Honor, this is respondents exhibit three and this email chain which talks about this. I mean there was a plethora of correspondence with Ms. Pabone the chassis the chassis Pabone the NLRB person that was deciding the deferral at that time. And this was also raised with the board the ALJ. It was raised with the this was this was raised with the administrative law judge, Your Honor, it was in the record at the time. And it's this is Ms. Pabone was the person that decides whether to defer it or not. She was the person that decided that she just she initially decided to defer it. Is there a special position where you decide where Sunsark Action would be a semi-judicial decision? Well, it's it took me by surprise, but I mean I because initially she decided to do it and then they they came back and you got any hand what does it say? Oh, I'm sorry, Your Honor. What is the what is it this what does it say? Want me to read it? Not that it is the appropriate language that we're in conditions or it says that explains that you're waiting it's the payment of the government that you're not

. We agreed to defer arbitration and if it had been deferred to arbitration at that time, the only thing that and it's specifically in there at t116 on respondents or respondents exhibit three of the record, you can read it yourself. It specifically says that the only thing that the that HP3 did not agree to waive and let it proceed into arbitration was the timing of the payment. In other words, once the government paid it, whether you know that it was a prerequisite for the government to pay it first was the only thing that that HP3 did not agree to waive. That was before the government paid you. Right. And it was also at that time we were seeking deferral the idea. Yes. Always saying is that if there's an award against us, we are not effective say we're not going to pay it until the government pays us. Yes. And that was and that's fully appropriate under the contract. The contract itself had that 45 day rule that if you didn't object to that those those letters, which were issued in July of 2012, they didn't file any charges or grievances. We're all for that explanation at all to the board. Yes, Your Honor, we offered all of this and all of this is in our exceptions to the brief. You just stated it was a clarification and effort to clarify the waiver. And what you've added here is that it's a very specific waiver as to the receipt of addressing your condition. The receipt from the payment and so I never that you've never stated that before in this argument and my question is did you tell that did you tell that in our the corporate board people? Yes, Your Honor, the in your exceptions I take it in LRB then LRB's statement earlier that that was just correspondence between the union and HP3 is not correct. Ms. Pabone was copied on that correspondence. Ms. Pabone, the NLRB person that was deciding whether to defer it was copied on that correspondence. That for being copied on it is at T1 14. Sorry, Your Honor. Your correspondence referent to it's what you just said. Yes, Your Honor, this is respondents exhibit three and this email chain which talks about this. I mean there was a plethora of correspondence with Ms. Pabone the chassis the chassis Pabone the NLRB person that was deciding the deferral at that time. And this was also raised with the board the ALJ. It was raised with the this was this was raised with the administrative law judge, Your Honor, it was in the record at the time. And it's this is Ms. Pabone was the person that decides whether to defer it or not. She was the person that decided that she just she initially decided to defer it. Is there a special position where you decide where Sunsark Action would be a semi-judicial decision? Well, it's it took me by surprise, but I mean I because initially she decided to do it and then they they came back and you got any hand what does it say? Oh, I'm sorry, Your Honor. What is the what is it this what does it say? Want me to read it? Not that it is the appropriate language that we're in conditions or it says that explains that you're waiting it's the payment of the government that you're not. The time limits of the payment of the government is what you're referring to. Yes, Your Honor. I mean you know I what we said in this is the whole the whole idea at the time and it's explained in this email. Was that we would defer this arbitration decide whether it was a term or a layoff and then go together for the claim process processing if it was determined to be a layoff. All right. It says also as I've discussed as I have discussed this matter with Ms. Pabone or letter does not our entire written agreement on the time limits issue. We did not agree to waive all time this issues we agreed to allow the grievance and arbitration to proceed for filing purposes but whether at other aspects of a time limits and entitlement for the or the timing of payment was not waive. For example in our June 13th letter HP 3 advised the union that it would seek payment from the government and acclaim before having to pay any severance. The unit did not challenge that in a timely manner and will not agree to arbitrate that issue. What we did agree to arbitrate is whether we are dealing with a layoff or termination if the former liability is triggered for the government but not for HP 3 until the government pays what it owes. If the latter nothing is owed at all as we have explained to the NLRB while we are not waiting to submit the claim to the government the government may object to processing it before the arbitrator has ruled it was a layoff as they have. Consequently a finding from the arbitrator on liability may be necessary before the government processes the claim. If such occurs we would expect that the union would join in our claim to the government so that it can be expeditiously paid. That was the plan. The fact that the government has paid it puts a little, makes us look a little bit different in the eyes of the court I understand. But it does not eliminate the fact that there is no arbitrator or court decision and the government is still claiming it. You said a minute ago in your rebuttal that this matter deserves remand. Yes, Your Honor. We were to agree with you. I am not suggesting that there is any chance that we will or we won't. But if we were what would we say? I mean specifically remand for what? We have to be specific. What is it that you would seek to be determined or done on remand? I think the court needs to remand it to the board with instructions for two things. One, to consider whether deferral to arbitration is appropriate under the proper idea of if this one waiver of a non-procedural or a timing term is done. The second issue is not substantive. So deferral was appropriate at the time. The board can ask the other questions that the court is raising here today as well. But the second issue that has to be addressed on remand I believe is the board's interpretation of the contract in light of M&G polymers and also the acceptance of evidence to determine all the context and interpretation of the agreements that are at issue here. That would be the 2011 evidence. Yes, Your Honor. The 2011 evidence and that's also discussed at T114. It's discussed in our exceptions as well. I just wanted to be sure that you specified to us what you would expect or ask

. The time limits of the payment of the government is what you're referring to. Yes, Your Honor. I mean you know I what we said in this is the whole the whole idea at the time and it's explained in this email. Was that we would defer this arbitration decide whether it was a term or a layoff and then go together for the claim process processing if it was determined to be a layoff. All right. It says also as I've discussed as I have discussed this matter with Ms. Pabone or letter does not our entire written agreement on the time limits issue. We did not agree to waive all time this issues we agreed to allow the grievance and arbitration to proceed for filing purposes but whether at other aspects of a time limits and entitlement for the or the timing of payment was not waive. For example in our June 13th letter HP 3 advised the union that it would seek payment from the government and acclaim before having to pay any severance. The unit did not challenge that in a timely manner and will not agree to arbitrate that issue. What we did agree to arbitrate is whether we are dealing with a layoff or termination if the former liability is triggered for the government but not for HP 3 until the government pays what it owes. If the latter nothing is owed at all as we have explained to the NLRB while we are not waiting to submit the claim to the government the government may object to processing it before the arbitrator has ruled it was a layoff as they have. Consequently a finding from the arbitrator on liability may be necessary before the government processes the claim. If such occurs we would expect that the union would join in our claim to the government so that it can be expeditiously paid. That was the plan. The fact that the government has paid it puts a little, makes us look a little bit different in the eyes of the court I understand. But it does not eliminate the fact that there is no arbitrator or court decision and the government is still claiming it. You said a minute ago in your rebuttal that this matter deserves remand. Yes, Your Honor. We were to agree with you. I am not suggesting that there is any chance that we will or we won't. But if we were what would we say? I mean specifically remand for what? We have to be specific. What is it that you would seek to be determined or done on remand? I think the court needs to remand it to the board with instructions for two things. One, to consider whether deferral to arbitration is appropriate under the proper idea of if this one waiver of a non-procedural or a timing term is done. The second issue is not substantive. So deferral was appropriate at the time. The board can ask the other questions that the court is raising here today as well. But the second issue that has to be addressed on remand I believe is the board's interpretation of the contract in light of M&G polymers and also the acceptance of evidence to determine all the context and interpretation of the agreements that are at issue here. That would be the 2011 evidence. Yes, Your Honor. The 2011 evidence and that's also discussed at T114. It's discussed in our exceptions as well. I just wanted to be sure that you specified to us what you would expect or ask. We can definitely, I can definitely submit something additional if the court would like clarification on that. If you'd like us to ask exactly what we want, what we would want, we can definitely submit that. All right. We have asked questions on the board. Perhaps in LLB, they didn't have an option to address. Pick. I'm going to let it slide. I'm going to let it slide. I'm going to let it slide. Just let the clerk know. He thinks he wants argument on it. Oh, I want to let it slide. Yes. Just give yourself. If you wish, after you consider what he's been said in rebuttal, if you think there's something that would say that you didn't have an opportunity to address, or whatever you want to say in three pages you can file a letter with us to clarify the matters that are risen in this argument. And then within five days of receipt of the letter, then you would have an opportunity to respond. But only to respond to what he has raised in the letter. Is the company going to give us a letter on what they're seeking on Remand? We can certainly ask for that. We select that. Okay, thank you very much. I conclude the argument. We have an argument calendar. In the case it's a panel stands in the system more than one at a time.

Okay, we see you, please. And we'll call it next case of the day. That is Hallmark Phoenix, Assistant National Relations Board. Mr. Baines will give me your consent. You go ahead, Dr. Kahn. Thank you, Your Honor. The distinguished members of the panel may please the Court. We are here, and we are present in this Court because two federal agencies decided to disregard a balanced labor policy and focus their efforts, their combined efforts against a small, disadvantaged business. My client, HP3, is a small, disadvantaged business. It is experienced, since the beginning or since the infancy of this case, it is experienced arbitrariness at every turn. From the insourcing? Whether you are in a position to complain about arbitrariness is what I would like to find out. And that is, why did you get money from the government on the pretext of paying your employees' severance pay and then didn't pay you? That is what I want to know, and what is your reason for getting the money and not paying them? Your Honor, I don't think it was a pretext at all. This says that the, just looking at a note in the National Labor Relations Board, we note that the prior to the hearing, in this case, the respondents successfully gained reimbursement from the United States Air Force. The severance payments for the respondents unconditionally stated that it was obligated to make based on the same contract provisions relied on by the General Counsel and cited in the judge's decision. Yes, Your Honor. The Air Force is... Everyone here and here was, do not agree with the sound, are you a basis standard articulated, etc., but agree that under this standard, the respondents paid to make severance payments violated the act. Well, Your Honor, if you look back at the record respondents exhibits, sorry, Your Honor. Did you make an application and the government for payment for the severance? Not unconditionally, Your Honor. But did you make a statement? We did make an application. We did make an application and the Labor Union did not join HP3 in that effort. And did you pay it? Did it pay you? The government did pay us, but they said they were going to claim it back if a court or an arbitrator decided that it was not warranted. Did you pay it to them? Did you pay it to the government? Not the money. You said unconditionally, oh, wait, I agree, I owe it. Well, no, Your Honor. The government has said that, or the Air Force, the money is with HP3. It's with HP3. It's not paid to anybody. Wait, is it set aside as a security? I don't know that it's set aside. It's been? I don't know that, Your Honor. But I do know... From my point of view, yes, Your Honor. ...I have read the briefs and the way I understand the record now, and you can change my mind, of course, is that that colors everything that you did or that you copied it had with HP3. A patina that you... that... that cast a doubt on every position you take. Well, I understand that, Your Honor. I understand how it looks, and I understand the court's position on that. But the court also has to understand the position that HP3 was in. The government, as this court knows, underlitten in other cases like that. Courts and arbitrators are the final arbiters of what a collective bargaining agreement says. The NLRB doesn't interpret agreements like this. And the Air Force was not going to consider it a binding decision on what the collective bargaining agreement meant until either an arbitrator or this court decided what the agreement meant. Well, Your Honor, that's not... HP3 has not said they're not going to pay it. They've just said that we don't know who's got the rightful claim to it. You are saying in this case that you do not owe it? Well, yes, Your Honor. If a... if a... if a court or an arbitrator says... If... No, Your Honor, that's not correct. That's not correct. That's a misrepresentation of the record. The... Well, if we take a look at the letters that started this whole issue. The July 13th and the July 9th, 2012 letters that are GCX, 4 and 24. What those letters advise the union of was that we will... The government had... the Air Force has told HP3 that Severance Pay is not owed. They said that at that time. And we said we will... we will claim it if you will join us. And we will... we will pay it if it's paid, depending on what happens in the... in the future. Now... What did you just say? Depending on what happens. Yes. No, well, not exactly, Your Honor, because... because what happened was an intervening thing. What is the intervening thing? The intervening thing was a charge and refusal to defer to arbitration. Because the arbitration was what was supposed to decide, whether this was a termination or a layoff, and whether it was owed, or whether HP3 was a successor contractor underneath the agreement. You already represented the government that it was owed. No, Your Honor. We said that we believe it's owed for these reasons. And we disagree with the Air Force's position. Even though you were saying you didn't know where you owed it or not. Well, Your Honor, there's... once the charge was filed, and they bypassed arbitration and the grievance procedure, that placed us in a totally... that placed HP3 in a totally different position. You should be able to answer the question. I'm sorry, Your Honor. I will try diligently to answer that. I understand, but... I don't know... I'm completely lost as to how you can obtain the money from the government for this purpose. And then say, I'm going to determine hereafter whether I owe it. Because I don't... my understanding, correct me if I'm wrong, is that you represented the government that you did owe it. Now, maybe... did you say that the government... I might owe this, so pay us the $4,000, $3,400,000, and later the termination, whether it was owed or not. Well, what we represented to the government was that it was owed under the government's contract. That it was owed under the government's contract, that the government had to pay HP3 this, and that it was... that it may be owed depending on whether this is a termination or a layoff. Now, the government... The government said... Your Honor, the government said that to HP3. That's what started the entire thing. This claim was submitted and was pursued after the union argument, and it already filed its charge. So we were placed in a position of having to pursue it during the pendency of a charge. When the charge was made, the issue was whether this was supposed to go to arbitration or not. And it was... it was not whether this was paid or not. Now, it was fortuitously paid, but then the government immediately came back and said, if a court-worn arbitrator decides that this is a termination or a layoff, we want it back, and we will claim it back. Well, that would claim it back if what... Because you would take in the position that it was a termination. Yes, well, the government was taking the position that it was... The Air Force was taking the position that it was a termination and not a layoff. So therefore, it was not owed, and that is the letters that I was talking about earlier. The government was taking a position that it was not owed. When you asked for the money, they paid it to you. Well, they ultimately paid it after about a year and a half. But, you know, that was during the pendency and right prior to the trial. They agreed to pay it. They didn't pay it. They paid it just right prior to the trial in this case. But that was during the period that we were also trying to ask the NLRB to defer to arbitration so we could definitively address the issue. If the government paid you money for that purpose, they had no other obligation to pay it other than for that purpose, and they paid it for that condition. Why aren't you simply holding that property essentially sort of a form of private custodial length, holding that money for the benefit of these... The people to whom it is owed. Well, I honor there. As we've laid out in the brief, there are several competing claims to this money. There are other entities, there are banks, there are other things. Well, there are other court cases too. This is not the only one. Are the court cases involved in these employees? The work these employees did, yes, Your Honor. The work these employees did. The work they did, the work they did, the work they did. And you're going because the contract was not performed in the satisfaction of the work you're going to duck the employees that performed the work. No, Your Honor, that's not what this is about. This is about whether the termination, this is a termination early off. This is a contract interpretation issue. Understand that, which is the holding the money, because there were contracts that involved the work that these employees did. Well, yes. That you're going to charge them for their faulty work on a contract that you did. No, Your Honor, we're not setting off the employees. We're just trying to get the... We have... From the beginning of the case, all HP3 tried to do was to enforce the collective bargaining agreement. All of it, not just part of it, not just the severance part, not just the vacation pay part, but also the grievance procedure part. At some point, labor policy got skewed in this country where we basically can disregard part of the collective bargaining agreement and can screw it against or even disregard it against a contractor. Here's what I understand is that the Labor Board, generally, would say, yes, arbitration can take it. If you agree, let it get to America. What you would do, we're contending, according to the briefs here, is that the statute of limitation barred all of these claims. No, Your Honor, that is false, too. That's a misrepresentation as well. If you look at respondents exhibit three, page T116 to 117. Exactly what we were going to do is laid out in those paragraphs. Were you going... Did you agree to litigate, followed the merits of the claims of the employees? Yes, Your Honor. The only thing that we did not agree to litigate... Well, because they had their own agenda and didn't want to defer it. They wanted to pursue this as a labor charge rather than defer it to arbitration. The board did. That is what we're saying as arbitraries because they should have deferred this to arbitration so it could be definitively decided. Then the Air Force would not have the argument that no court or board has decided the issue. Therefore, there's no pending claim. You're not raising the statute of limitation with respect to any of these claims. The only issue that we had raised is laid out in these paragraphs. I can read it. I'm not going to read it, Your Honor. All we said was that we had sent those letters saying that we can't pay the... The HP3 cannot pay this until the government pays. The Air Force is objecting to this and saying that it's a termination not a layoff. If we agree to defer this to an arbitrator, we can address all these substantive issues. Whether it's a termination, whether it's a layoff, whether HP3 was a successor and interest... Before you got your money? Yes, Your Honor. We agreed to defer all these issues. The only issue that HP3 said that it would not waive is that the government that it couldn't pay until the government... The Air Force paid it. That is the only issue. Initially, the NLRB said yes. Then, after the union complained, it withdrew the deferral and proceeded with the charge. But here we are five years later. We're sitting here in the court having to argue because the Air Force needs either a court or an arbitrator's decision to let go of its claim on HP3. If we had just agreed to defer this to arbitration at the time and decide those issues of whether it was a termination or a layoff or whether HP3 was a successor and interest... Then we would not be here. I'm not asking a lot of your time. I'm going to give you some more time to make your argument. I want you to make all the points that you can like you have to make. Okay, Your Honor. For a couple of minutes. Yes, Your Honor. I'm in a rough time. No problem, Your Honor. I understand. I know it is difficult to wrap the court's head around. But this is what happens to a small business when two agencies combine to go after them. We have one agency saying that has a contract with HP3 that's saying, we don't know this. This is a termination, not a layoff. We have another agency saying, you do owe it. And here's HP3 in the middle trying to figure out what the best approach to this is. This case is not about the interpretation of the contract per se. This is a labor case. This is about whether what HP3 did prior to the charge was an unfair labor practice or not. And then, you know, and so when we look at what they did, all they did was ask for a determination, said, we're going to rest on the grievance procedure itself with respect to whether or not HP3 will pay it before the, before the Air Force pays it as they're entitled to do. And so when we look at whether this case, the substance of this case, we look at the terms. Now, whether or not this is a termination or a layoff or whether or not HP3 was a successor in interest is decided not only by what the union said it was, but also by what happened in 2011. 2011 is the part of the record that is missing. There is nothing from 2011 except what the union was allowed to say about it. What was not allowed to be said was that HP3 was asked for a proposal from the government at that time to decide whether it needed to outsource the contract and evaluate the wages to determine whether it was in the best interest of the government to proceed with HP3 or insource it. In that sense, there was a proposal at the time and there was a bid. And HP3 went to the union and asked them for to reduce their wages to compete with what the government wages were. Now, you won't find this in the record, Your Honor. The only reference to it, you'll find in Respondents Exhibit 3. And the reason you won't find this in the record and the reason why it's so important is because the judge below did not allow any testimony with respect to anything that occurred in 2011. And so here we have records for that, or what you would show if you have a louder. It's laid out and exhibit Respondents Exhibit 3 and it's also laid out in the exceptions to the court asked for a complete record. And there's a September 8th document that was added to the record. Page 4 of that document talks about page 4 through 5 of that document talks about what was that a rebid did take place and how that occurred. And that's exception 1 in the document, document 513186848, page 6, filed on September 9th, 2015. But those types of things, whether this is a, whether HP3 had a sound argument with a basis that it was a termination and not a layoff, that interpretation came from a government agency. And HP3 just simply forwarding it. If that wasn't a sound argument basis, then it's the Air Force that was a fault for that. If it was, if HP3 was not the successor contractor and it was not a termation or layoff, then all the major issues in this case, the severance and the vacation pay, go away. They're not, they are not, because the carryover hours that were not paid. And also the term- What are carryover hours? Carryover hours, your honor, are mentioned in the agreement. They are the hours that are carry forward from year to year. And they're left over hours, like vacation hours that are accrued. There's a maximum in carryover, but there's no carryover at all. And the, in the event that there is a, there is a, that HP3 is not the successful contractor on a rebid. And so that was one of the crux, that was one of the main arguments. And one of the things that HP3... What was the successor argument? Is the language is kind of awkward? Well, it's, it might be awkward, your honor, but in that context, we go back to M&G polymers. We don't construe whatever, and accept whatever the union says. We have to construe things in the context of contract principles. And so CBAs, you know, we look at M&G polymers and DR Horton. Those cases all talk about what we have to, what, you know, that there's no conflict between labor policy and the Arvitation Act. There's no conflict between contract principles and collective bargaining agreements. There are to be construed in a context of what happened. Looking at exactly, you know, applying those facts to the law. The problem with the judge below is that he did not allow the facts of that situation to be put into the record. So that, so we were lost in terms of being able to prove that argument. That was one of the major issues. And I'll reserve the rest of my time, your honor. I'm going to choose to save some time for a bottle. Thank you, Your Honor. Mr. Grotto, we'll include represent national relations. May please the court. My name is James Senguella for the National Labor Relations Board. I would like to begin by correcting a couple of misstatements made by opposing counsel. First, I will go to a letter that Hallmark Phoenix three sent to the Air Force on December 11, 2012. This is Respondents Exhibit 11. And I'm just going to read from it in this regard. And I quote, once the US Air Force made official that it would not exercise the fourth option year of the contract in July 2012, HP three became obligated to pay severance at contract end to non-exempt employees as fringe benefits consistent with the provisions and conditions of each collective bargaining agreement. Additionally, the company did not ever give assurances that the merits of this dispute of this contract interpretation dispute is the whether or not there had been an unlawful midterm contract modification to the board. Those were not given to the board's regional director. Those could have been given before the administrative law judge and they weren't. Those could have been given again before exceptions to the board and they weren't. What do you do with the statement that the ALJ wouldn't allow any evidence as to 2011? The company has never demonstrated how that was exactly relevant to interpreting the party's agreement. There's no reference whatsoever in I have the TWU or the IOTC CVA's about what constitutes the rebitting process, what role and what distinction there is between insourcing and outsourcing. What do you do with the response exhibit three? Did that explain why that information was relevant and should have been heard? The board concluded that that information wasn't based on that response and that response was deficient. I think the crux of the matter is, as Judge Jolly opened with, is you can't have a sound arguable basis if you're telling people that the contractual terms that mean one thing, don't mean one thing and then you turn around and say to another party that no, in fact these actually do mean what we're saying that they don't mean over here. That's exactly what the company's done here. Isn't that a question that's in dispute that therefore the ALJ should have at least considered? Maybe the ALJ would have rejected the company's position but I don't understand the justification for not allowing the information to be received and considered. I believe the lack of justification falls from the company which is that with looking within the four corners of the two agreements, it's unclear what relevance that information had. I realize the company has stated that it was very important to their interpretation of the agreement but the... What has the information been caused and what is the year 2011? It's kind of unclear as the company's council said forth that's not in the record. There is some references to that information in Prespondence Exhibit 3 but it doesn't really explain how or why the company was privileged to interpret either the Severance Pay provisions and either the collective bargaining agreements to not obligate them to O Severance Pay in the event of the Air Force En sourcing the work. What year 2011 is that the year that the contract terminated or what is the importance of 2011? How does that figure out? In 2011 the company was contacted by the Air Force and asked as the company's council represented for its position on whether or not cost savings could be had on if it insourced the work. Both the unions and the company worked together to respond to that and ultimately the Air Force decided that there were no cost benefits. The Air Force then the following year in 2012 decided instead that it would not renew the VOMS contract and would insource the work. What does Exhibit 3, what subject matter does it reference specifically? Again it's somewhat unclear because Exhibit 3 is a chain of emails between the company and the unions. The company was directed about two things. One about whether or not the company would allow the merits of this dispute to reach an arbitrator and what exactly it meant by waiving certain timeliness defenses. Two, the company's view that the union should have been more involved in the... It's a bit to try and stop the Air Force from insourcing this work. The only... The only knowledge that I have is what is communicated in the company's brief and supportive exceptions to the board that we live with the court on September 8th. When they offered this at the trial I guess before the administering of law judge. And when they offered it there had to be some sort of argument in the record as to why it was relevant and why they were offering it. Yes and I have reviewed the record I'm kind of unclear as to what that argument was. There seems to be a logical step missing from the representations that the company made to the board as to how the events in 2011 impact the interpretation of the collective bargaining agreement in 2012. And it's unclear to me what that connection is. It was apparently... Well, is the year that the contract was terminated? Yes. And the information that it was a contract, a three-year contract? It was a four-year contract. I'm talking about the CBC collecting money. As I understand the VOMS contract with the Air Force it was a two-year contract with two additional option years, 2011 and 2012. And the Air Force ultimately decided to exercise the option in 2011 to renew it for the third year. The collective bargaining agreement was obviously the term of the... Oh, period. The collective bargaining agreement was adopted. The collective bargaining agreements have slightly different terms. The agreement and effect between the company and TWU ran from October 2010 through September 30, 2014. Was there any argument that the correspondence they were offered had any... ...modification of the contract between the union and the company? No. It was only the matter of their work that they were offered. Yes, as far as I'm aware. And... Right now, when the Administrative Law Judge denied the introduction of the evidence, did it give its reasons for denied? On the record? I don't actually know the answer to that, Your Honor. I do know that the board did review the company's arguments in that regard on exceptions and upheld the Administrative Law Judge's decision in that respect. All right, and did the board decision fully explain itself? I mean, is the why it was excluding the evidence from further consideration? No, and I think part of that is because there was never really explained what the argument was. Are the briefs before the board part of the record here? The company's brief before the board is not part of the record. However, we did lodge it with the court of the courts request. However, we did lodge it with the court of the courts request. The company's brief to the board. You gave it to us? Yes. We do have it though, it's not part of the record. Yes. You have to my knowledge, everything either in the record or in extra record material such as the company's exceptions brief. All the company's arguments in regard to what correlation there possibly could be between the discussions with the Air Force in 2011 and the, and these midterm contract modifications. And I think importantly to note is that the company never accepted to the administrative law judges finding that logically the Air Force could not be a successor contractor to itself. And in that regard, these arguments in terms of how the decision to insource makes the Air Force's successor contractor under the bargaining agreement was not presented to the board. And as such, at least with that regard, the board is entitled to summary enforcement of that portion of its order. What do you do with the argument that's made that it was the board's intervention precluded the parties from going to arbitration and that arbitration would have been a desirable way of proceeding at that point rather than having the board intervene? The board would have under call your insulated wire, which is the controlling precedent in this, in this situation. The board would have been happy to defer this matter. If three requirements were met, one, a stable bargaining relationship existed, two, the, the party in favor of arbitration remains willing to arbitrate the substance of the issue. And three, determination of whether the contract and its meeting are central to the dispute. And it's with element two that the board had issued. Because as the, to this date, the company has never stated that it would waive all timeliness except defenses. And that is that waiver of procedural defenses is what the board requires before it will decline to exert its authority under Section 9A of the Act to remedy unfair labor practice. And that's because it says that he agreed in all respects except one minor respect as I remember. That's incorrect. Reading from the, I'd like to take a moment to actually read from the exhibit that Council referred to. And I quote from the companies November 27, 2012 email to one of, to one of the union presidents. And I quote, we did not agree to waive all timeliness issues. We agreed to allow the grievance and arbitration to proceed for filing purposes. But whether other aspects of timeliness affect entitlement or the timing of payment was not waived. In other words, based on that and based on the fact that the company has never recanted that hedging of its bets as to what timeliness defenses it would waive, the board couldn't defer this. What if the company, I don't know what the company's position would be, but what if the company were to represent in a sufficient way that it would waive all timeliness defenses then what would the board do at that point or where would we be? If that had happened today, I'm not sure what we do with that. If that could have happened before the administrative law judge, that could have happened after that email was sent, a clarification or recanting that they actually did mean to waive all timeliness defenses, that could have even happened on a motion on the company's exceptions to the board that never happened. And it was the company's burden to make those assurances at the board that the alleged unfair labor practice would actually get to an arbitrator. But I don't understand really that you said they had to waive all timeliness issues because they could surely raise timeliness issues before the board in the board's interpretation of the collective bargaining. I respect that you just agree with that judge, because to the extent that there's a procedural timeliness issue, that must be waived and the board won't consider that the only procedural timeliness issues that the board will consider is within section 10b of the act, whether or not the charge was timely filed. If the board would consider any sort of reasonable argument, the argument has supported by a reasonable argument on both sides, then the board backs off and doesn't do anything about it, it's not their labor rate, it's his own sand law. And so if they had a genuine good faith timeliness argument that the board cannot consider this because under the contract they were required to file agreements on such and such a date, then you could not accuse the board of being in bad faith by raising a procedural defense that was provided for the end of collective bargaining agreement. And you've got to have bad faith in order for them to act in any way if they don't find bad faith. They can't act. In bad faith, Mark. Yes, the allegation here, to first respond to that, I think arguably that is correct, but that's not this case. This isn't a case where the severance pay provisions, either the severance pay provisions or the vacation pay provisions, shouldn't or wouldn't apply because of some procedural timeliness deficiency within the agreement. And in fact, the company did in fact represent to the U.S. Air Force, that in fact they all did apply. So I do think that while that might be correct in another case, potentially that's not this case. Well, I mean, it seems to me that the board, what they said is we will not waive time on this as far as arbitrage is concerned. We will say this case is arbitrable. Give it to the arbitrage. And when we get to the arbitrage, we are natural to go into raising the kind of divances that are about it under a good faith negotiated collective bargaining agreement between us and the union. The union can raise them, we raise them as so. And in fact, they would have to do it before the board, it seems to me. I see what you're talking about, Judge Jellie. I agree and I still think even with regard to the first issue, with regard to whether this should have even been deferred to arbitration, is there never was this plain commitment from the company to permit this to go on the substance of the issue. What time on this issue is are you talking about? You seem to be talking about two categories of time on this issue. One internal to the CBI and some other extraneous limitations. What are you talking about? Well, you're on it that's... What's the non-waver provision? Well, you're on it. I think that's the point is I don't know. And the company has never explained what it meant by we're willing to waive certain timeliness issues. And when to this day, they still haven't explained that. And it's... They have waived the major time on this issue. They've said, look, we'll put all this before an arbitration. And when we get before the arbitration, we're going to raise the statute of limitations. He may have may not agree with us. We're not waiving our arguments that we have under the CBC. And we are conceding that the arbitration has the authority to decide to address all of the issues raised in the collective bargaining agreement. But that's not quite what the company said here. Why is it? And what did they say other than that? They led it before we waived it before... They said we'll let the arbitration decide the case. That's essential what they said. They respectfully dodged Ali, I disagree. They merely said that they had processed the grievance. They didn't make clear what defenses they'd be raising in front of the arbitrator and whether or not they would be purely procedural based on the grievance and arbitration provisions. Any exceptions that were made to preserve the point. How did they preserve this point? I generally, when determining whether a party is waived a... Or properly accepted to an issue under Section 10E, we generally tend to err on the side of caution. And from reading the company's exceptions to the board, we did feel that the company had put the board on adequate notice that it was challenging the administrative law judge's decision not to defer this matter to arbitration. And in that regard, the company could have clarified some of these wishy-washy or unclear statements as to which or whatever timeliness decisions it would be. If we decide that the employee agreed to have the arbitrator decide this case and we will raise and union can raise any sort of defenses that are available under the collective bargaining agreement and present them to the arbitrator decide. Then we say, do we say, the labor board therefore abused its discretion in exercising jurisdiction over this collective bargaining agreement and we deny enforcement. I don't believe so because the board gets a fair amount of deference in terms of its decision not to defer. Right or wrong. I believe that the proper course of action for the court in that situation to be to remand it for the board to defer to arbitration to make sure that this did in fact go to an arbitration and that the underlying alleged lawful contract was addressed by the arbitrator. Remanded to the board not for arbitration but to clarify exactly what the way where non-way where it is and if they are still insisting on some impromissible way where that's one thing. But I know the threshold question would be clarified what it's waived not waived. Yes, I believe that's correct but I don't believe that's necessary in this case because the burden is on the party seeking deferral to demonstrate its willingness to arbitrate. And even if the party was arguably willing to arbitrate which I don't think the record evidence supports in this case, the boards not bound statutorily to yield to other methods of dispute adjustment under Section 10A of the Act. It does abuse its discretion under its own rules if under the correct circumstances it assumes jurisdiction over cases, crockling, or virtual. That's correct Judge Jolly but I can't stress enough that there is devoid in this record. The only thing I would add to that is that's said earlier. They're taking this money from the government under false pretenses which seem to me false pretenses and still I mean I'll consider the arguments are made here but it's highly questionable. That may call everything because one of the reasons I understand it that the board has to be satisfied with is that the case is going to be arbitrarily in good faith. And if somebody is taking money we may ultimately determine is taking in bad faith and it's not given it to the employees to whom they made the representation it was going to. Undamines any kind of good faith or assurance that the labor board not have that proper procedure is going to be false. That I think is absolutely the concern in this case your honor. Additionally I would add that part of the board's call your inquiry generally and within the board's call your policy which has been at least in regards to these sort of cases unchanged since 1973 is that even if a party satisfactorily expresses a willingness to arbitrate. The board will not defer if the party's interpretation of the contract is not based under a good faith defensible interpretation of the agreement. The idea is that the initial prerequisite is that the parties themselves have an ongoing relationship and they're acting in good faith they have but they have a dispute and it's a resolvable arbitration. So the predicate question is the one that Judge Jolly posed in. Yes. Does the board take the position that the company took money in bad faith with no intention of paying it or instead is it the board's position that the company just took the money and it was undecided at that point whether it should be paid. The board takes no position on that because the fact that the company was paid by the Air Force is irrelevant as to whether or not there was a midterm contract modification. The fact that the company lobbied the Air Force under an interpretation of the contract that had both these severance pay and vacation pay provisions applying is the critical inquiry. Where the money, if this court enforces the board's order in full, where the money ultimately comes from is the company's problem. And with regards to if the company took this money as you suggest in bad faith from the Air Force and doesn't have it available to pay. I'm not suggesting an enforced order but I'm not suggesting that that's not our business. No, the board is not taking a position on bad faith. Yes. But we are taking a position that the representation that it needed that money to to satisfy these claims does constitute a lack of a sound arguable basis. The board did make a reference and put note three that we know prior to the hearing of this issue, the Department of Justice and Reimbursement in the United States Air Force is a very famous and a very unspoken statement that was obligated to make based on the same contract provisions or a lot owned by the General Counsel and cited by the judge's decision. Yes, I think that's the only reference that the board made. Yes, and that's that that as I read the board's decision is part of their part of the boards rationale that there was no sound arguable basis. Yes, exactly. I see that I'm out of time if there are no further questions. Thank you, Your Honours. Thank you, Mr. Row. Thanks. Thank you, Your Honour. I can address a few points here. First of all, in making a claim to the government under the Federal Acquisition Regulation, it is required that things be stated as definitively as they were in that claim. That doesn't mean that that abandones all rights under the collective bargaining agreement. It simply means that with respect to the government in order to get the money from them, HP3 had to assert it strongly or they weren't going to grant it at all. Now, let's go back for a minute and they still to this day are saying that they will claim it back if a quarter arbitrator determines otherwise. So those things, that's why it hasn't been paid out. It's not because the it's not because and there's no proof otherwise. The only proof in the record of why HP3 has not paid this out is because there's a competing claim between the NLRB and the United States Air Force. And so. I don't know that Your Honour, it's just not part of the record. Let us the council and say, Craig is that money. You still have it. And if you have to come back and say no, we've spent that money and have it known further. When you obtained it on the pretense, it was on the reason that it was for these employees. Where does that put your kids? I think that puts it in the same place it is now, Your Honour, which is deserving of remand. All these things were not addressed by the board. This is an unfair labor practice case Your Honour. This is not about whether they breach the collective Barney agreement. The Senate back to the board, then I found that it was false pretense. It took the money that you spent pay all other people related to employees. And we found that this is bad faith and you cannot rely upon the good faith, barging up the company and kind of a state out of order. At least those things have to be addressed. I don't think the court can make those factual determinations now, Your Honour, under SEC versus Chenery. So I think that those things, because the board didn't address those things and didn't consider other important aspects of the case, I think we're left with an incomplete record. So you're suggesting that it be remanded to be boarded for further clarification as it may come out of these organizations? Well, I think it should be remanded to the board for deferral to arbitration. Now on those issues, before we run out of time, let me address those. First of all, sorry, I have a question of arbitration. Why isn't the board's word sustainable based on the record that you unequivocally sold the United States government that you were alive or made a strong statement in order to get the money? And that in of itself is your interpretation of the contract which is not the CBA which is there and that alone is sufficient basis for that. Your Honour, because this is not a collective bargaining case, this is an unfair labor practice case. The question is whether HP3 acted unreasonably not whether it owes the money. That's not the question. When we look at this, let me understand what you're asking. Okay, Your Honour. You're on, we did raise this in the brief in the exceptions to the to the board below on page 12 document 513186848. Raised the issue of not deferring this to arbitration and that arbitration was the proper form. When we look at what we waived and I want to make sure this is clear in the record. The only thing that HP3 did not agree to waive in terms of tiling this was the timing of the payment. We agreed to defer arbitration and if it had been deferred to arbitration at that time, the only thing that and it's specifically in there at t116 on respondents or respondents exhibit three of the record, you can read it yourself. It specifically says that the only thing that the that HP3 did not agree to waive and let it proceed into arbitration was the timing of the payment. In other words, once the government paid it, whether you know that it was a prerequisite for the government to pay it first was the only thing that that HP3 did not agree to waive. That was before the government paid you. Right. And it was also at that time we were seeking deferral the idea. Yes. Always saying is that if there's an award against us, we are not effective say we're not going to pay it until the government pays us. Yes. And that was and that's fully appropriate under the contract. The contract itself had that 45 day rule that if you didn't object to that those those letters, which were issued in July of 2012, they didn't file any charges or grievances. We're all for that explanation at all to the board. Yes, Your Honor, we offered all of this and all of this is in our exceptions to the brief. You just stated it was a clarification and effort to clarify the waiver. And what you've added here is that it's a very specific waiver as to the receipt of addressing your condition. The receipt from the payment and so I never that you've never stated that before in this argument and my question is did you tell that did you tell that in our the corporate board people? Yes, Your Honor, the in your exceptions I take it in LRB then LRB's statement earlier that that was just correspondence between the union and HP3 is not correct. Ms. Pabone was copied on that correspondence. Ms. Pabone, the NLRB person that was deciding whether to defer it was copied on that correspondence. That for being copied on it is at T1 14. Sorry, Your Honor. Your correspondence referent to it's what you just said. Yes, Your Honor, this is respondents exhibit three and this email chain which talks about this. I mean there was a plethora of correspondence with Ms. Pabone the chassis the chassis Pabone the NLRB person that was deciding the deferral at that time. And this was also raised with the board the ALJ. It was raised with the this was this was raised with the administrative law judge, Your Honor, it was in the record at the time. And it's this is Ms. Pabone was the person that decides whether to defer it or not. She was the person that decided that she just she initially decided to defer it. Is there a special position where you decide where Sunsark Action would be a semi-judicial decision? Well, it's it took me by surprise, but I mean I because initially she decided to do it and then they they came back and you got any hand what does it say? Oh, I'm sorry, Your Honor. What is the what is it this what does it say? Want me to read it? Not that it is the appropriate language that we're in conditions or it says that explains that you're waiting it's the payment of the government that you're not. The time limits of the payment of the government is what you're referring to. Yes, Your Honor. I mean you know I what we said in this is the whole the whole idea at the time and it's explained in this email. Was that we would defer this arbitration decide whether it was a term or a layoff and then go together for the claim process processing if it was determined to be a layoff. All right. It says also as I've discussed as I have discussed this matter with Ms. Pabone or letter does not our entire written agreement on the time limits issue. We did not agree to waive all time this issues we agreed to allow the grievance and arbitration to proceed for filing purposes but whether at other aspects of a time limits and entitlement for the or the timing of payment was not waive. For example in our June 13th letter HP 3 advised the union that it would seek payment from the government and acclaim before having to pay any severance. The unit did not challenge that in a timely manner and will not agree to arbitrate that issue. What we did agree to arbitrate is whether we are dealing with a layoff or termination if the former liability is triggered for the government but not for HP 3 until the government pays what it owes. If the latter nothing is owed at all as we have explained to the NLRB while we are not waiting to submit the claim to the government the government may object to processing it before the arbitrator has ruled it was a layoff as they have. Consequently a finding from the arbitrator on liability may be necessary before the government processes the claim. If such occurs we would expect that the union would join in our claim to the government so that it can be expeditiously paid. That was the plan. The fact that the government has paid it puts a little, makes us look a little bit different in the eyes of the court I understand. But it does not eliminate the fact that there is no arbitrator or court decision and the government is still claiming it. You said a minute ago in your rebuttal that this matter deserves remand. Yes, Your Honor. We were to agree with you. I am not suggesting that there is any chance that we will or we won't. But if we were what would we say? I mean specifically remand for what? We have to be specific. What is it that you would seek to be determined or done on remand? I think the court needs to remand it to the board with instructions for two things. One, to consider whether deferral to arbitration is appropriate under the proper idea of if this one waiver of a non-procedural or a timing term is done. The second issue is not substantive. So deferral was appropriate at the time. The board can ask the other questions that the court is raising here today as well. But the second issue that has to be addressed on remand I believe is the board's interpretation of the contract in light of M&G polymers and also the acceptance of evidence to determine all the context and interpretation of the agreements that are at issue here. That would be the 2011 evidence. Yes, Your Honor. The 2011 evidence and that's also discussed at T114. It's discussed in our exceptions as well. I just wanted to be sure that you specified to us what you would expect or ask. We can definitely, I can definitely submit something additional if the court would like clarification on that. If you'd like us to ask exactly what we want, what we would want, we can definitely submit that. All right. We have asked questions on the board. Perhaps in LLB, they didn't have an option to address. Pick. I'm going to let it slide. I'm going to let it slide. I'm going to let it slide. Just let the clerk know. He thinks he wants argument on it. Oh, I want to let it slide. Yes. Just give yourself. If you wish, after you consider what he's been said in rebuttal, if you think there's something that would say that you didn't have an opportunity to address, or whatever you want to say in three pages you can file a letter with us to clarify the matters that are risen in this argument. And then within five days of receipt of the letter, then you would have an opportunity to respond. But only to respond to what he has raised in the letter. Is the company going to give us a letter on what they're seeking on Remand? We can certainly ask for that. We select that. Okay, thank you very much. I conclude the argument. We have an argument calendar. In the case it's a panel stands in the system more than one at a time