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Empire State Sugar Co. v. National Labor Relations Board

decided: September 23, 1968.


Lumbard, Chief Judge, and Smith and Anderson, Circuit Judges.

Author: Smith


This is a petition to review a final order of the National Labor Relations Board, 166 NLRB No. 22, and a cross motion by the Board to enforce. The order was issued upon a finding by the Board that the Empire State Sugar Company (herein the Company) had violated sections 8(a)(1) and (2) of the National Labor Relations Act, as amended. (61 Stat. 136, 73 Stat. 519, 29 U.S.C. § 151 et seq.)*fn1 The Board ordered the Company to cease and desist from giving effect to a collective bargaining agreement between it and the American Federation of Grain Millers, Local 332 (herein the Millers) insofar as it embraces the Company's powerhouse employees, and from recognizing the Millers as exclusive bargaining agent for those employees without Board certification. We deny the petition for review, and enforce the order.

In September 1965 the Company opened a new sugar refining plant in Montezuma, New York. Union organizational activity began shortly thereafter. Afterward, election petitions were filed, covering all the employees in the plant, by the Millers and the Teamsters. The International Union of Operating Engineers, Local 71-71A (herein the Engineers), sought to represent only those employees working in the powerhouse. No union received a majority of either bargaining unit in the election held on November 16, 1965. A new election could not be held for at least a year under § 9(c) (3) of the Act.*fn2

Organizational activity began again early in 1966. On April 26, the Engineers sent a letter to the Company claiming a majority of the powerhouse employees, offering to submit authorization cards as proof, and requesting recognition. The Engineers had at the time signed cards from five of the six powerhouse employees. On May 3 the Company replied that it doubted the Engineers' majority and felt that the question could best be resolved by the Board. About a week later, a similar request by the Millers made with respect to a plantwide unit met with a similar refusal. After a strike threat, the Company agreed with the Millers to an impartial card count. The impartial party, Father Shamon, on checking the Millers' cards against the payroll list, found that all the powerhouse employees had signed authorization cards designating the Millers; the same was true for a majority of the other employees. No check was requested by the Company or made of the Engineers' cards. Recognition of, negotiation with, and a contract with the Millers covering all of Empire's employees soon followed.

On July 7, after learning that Empire had recognized the Millers, the Engineers filed 8(a) (1), (2) and (5) charges based upon alleged unlawful refusal to bargain with the Engineers following the April 26 recognition demand, and unlawful recognition of the Millers. On July 26 the Engineers dropped the 8(a)(2) charge. On October 3 a second amendment dropped the 8(a) (5) charge and reinstated the 8(a) (2) charge. The same day the Regional Director issued a complaint, charging Empire with unlawful aid and assistance to the Grain Millers in violation of 8(a) (1) and 8(a) (2) of the Act.

The trial examiner found that the Company violated Sec. 8(a) (1) and (2) of the Act by recognizing and entering into the union security contract with the Millers covering a unit which included the powerhouse employees, and recommended an order that the Company desist from enforcing the contract in its coverage of those employees and withdraw recognition of the Millers as bargaining representatives of the powerhouse employees unless and until certified by the Board. The Board adopted the findings and in substance the recommended order.

The principal findings under attack are: (1) that the powerhouse employees were an appropriate separate bargaining unit, and (2) that the Company was faced with a real question concerning representation when it recognized one of two or more rival unions. Central to the problem on all issues is the fact that the Company's actions took place during the one-year period following the no-union election result, during which period due to Sec. 9(c) (3) the election procedure was unavailable for the resolution of representation disputes.

(1) The finding that the powerhouse employees are an appropriate separate bargaining unit is supported by substantial evidence on the record as a whole and must be upheld. The powerhouse employees are physically isolated to some extent from the rest of the plant. The powerhouse is treated as a separate department. Its employees are required to be experienced in operation and maintenance of high pressure boilers and turbogenerating equipment, and receive the highest wage rate of plant employees. This is not to say that they have nothing in common with the other employees, for in the off seasons they may be utilized on other maintenance work in the plant, and the entire plant operation is to a large degree integrated. Thus a contrary determination might have been sustainable. But the Board has very wide discretion under Sec. 9(b) in regard to unit determination, and we will not reverse its finding in the absence of an "arbitrary or capricious exercise of administrative discretion," not present here. NLRB v. National Broadcasting Co., 150 F.2d 895, 898 (2 Cir. 1945).

(2) The Board's condemnation of the Company's recognition of and contract with the Millers is based on a finding that the Company's action came at a time when there was a real question of representation of the powerhouse employees based on the conflicting claims of the Millers and the Engineers. This, the Board held, was contrary to the rule of Midwest Piping and Supply Co., 63 NLRB 1060, recognized by this and other courts (see NLRB v. National Container Corp., 211 F.2d 525, 536 (2 Cir. 1954)) requiring that a union's right to be recognized first be determined under the election procedures provided in the Act rather than by an employer's wrongfully usurping the employees' right of choice under the Act.

The underlying finding that there was a real question of representation is clearly supported by substantial evidence in the record, and must stand. Universal Camera Corp. v. NLRB, 340 U.S. 474, 95 L. Ed. 456, 71 S. Ct. 456 (1951). The Company knew that there had been organizing efforts by the Engineers, and had been informed that five of the six powerhouse employees had signed Engineers' cards by April 24, 1966. The Company did not place its refusal to recognize the Engineers on lack of a majority of the powerhouse employees, but on lack of reliable proof through a Board election, which was at the time unavailable. It did not call for a card check to test the accuracy of the Engineers' claim, but less than a month later signed with the Millers on a card check by an impartial person, to whom, however, the Engineers' cards were not submitted.

Ordinarily this finding that a real question as to recognition existed would conclude the Company under the Midwest Piping doctrine. The Company contends, however, that the doctrine cannot be applied here, since a Board election was barred at the time by Sec. 9(c)(3). But the difficulty raised by this circumstance cannot support the Company's course of action here. The purpose of the election procedure is to obtain a free employee choice without the intervention of the employer in the selection of the representative of employees. Temporary unavailability of the election procedure should not allow such employer intervention when other alternatives are available more consistent with the spirit of the Act. Here the Company might have authorized the neutral third party, Father Shamon, to conduct an informal poll of the powerhouse employees to determine the extent of their support of the Millers. See NLRB v. Yokell, 387 F.2d 751, 755 (2 Cir. 1967). Affidavits procured from the employees might have eliminated the ambiguity of the duplicate cards, NLRB v. Standard Steel Spring Co., 180 F.2d 942 (6 Cir. 1950). The Company could have recognized the Millers as the representative of the production and maintenance employees and declined so to recognize the Millers as to the powerhouse employees until the one-year waiting period was up, or until the Board should investigate a petition under 9(c) (1) of the Act and certify that no representation question was found to exist.

The Act might well be made more specific as to the courses open to the parties during the one-year period, but the lack of more specific guides cannot justify employer intervention in a genuine representation dispute, such as occurred here.

Since the statutory period has now run, it is open to the Board to conduct an election of a representative of the powerhouse employees under Sec. 9(c) upon a proper petition as soon as it deems appropriate. Apparently the Board contemplated such a course ...

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