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Schwarzenbach-Huber Co. v. National Labor Relations Board

decided: March 5, 1969.


Medina and Waterman, Circuit Judges, and Levet, District Judge.*fn*

Author: Medina

MEDINA, Circuit Judge.

Schwarzenbach-Huber Company, a textile manufacturing concern with its principal place of business in New York City, petitions this Court to review and set aside an order of the National Labor Relations Board and the Board cross-petitions for enforcement.

This case presents a sequence of events in a familiar pattern. The Textile Workers Union of America AFL-CIO used what is now commonly called the "representation" card method of obtaining the support of a majority of the production and maintenance workers in the Company's Juniata plant in Altoona, Pennsylvania. Claiming to have cards signed by a majority of the workers in the unit, the Union by letter of February 9, 1967 demanded a recognition of the Union and immediate collective bargaining. On February 13, 1967 the Union filed a petition for an election. On February 14, 1967 the Company by letter expressed its doubt that the Union represented "most or many" of its employees in the unit. The letter also joined in the Union's request for an election. On March 16, 1967 the election was held and the Union lost by a substantial margin. Thereafter proceedings were instituted by the Union to set the election aside, to establish various alleged unfair labor practices by the Company and to order the Company, without any new election, to bargain with the Union. These proceedings were consolidated; and, after a hearing and findings by the Trial Examiner, the Board set the election aside, held the Company's doubt that the Union had a majority was not a good faith doubt, sustained in toto all the claims of unfair labor practices; and, finally, on the ground that the unfair labor practices were so outrageous and pervasive as to dissipate the Union's majority prior to the election and that they made any new election in the foreseeable future impracticable, the Board ordered the Company to bargain with the Union.

We hold that neither on February 9th nor at any time prior to February 14th did the Union have in its possession valid cards signed by a majority of its production and maintenance employees. We set aside as not supported by substantial evidence on the record as a whole the finding that the Company's doubt that the Union had in its possession cards signed by a majority of its production and maintenance employees was not a claim made in good faith. We sustain the Board's finding of two of the alleged unfair labor practices. As to the other findings of alleged unfair labor practices, we set them aside and refuse enforcement on the ground that such findings of unfair labor practices are not supported by substantial evidence on the record as a whole. We set aside and refuse to enforce the bargaining order as the Union did not have a majority, as the Company's doubt that the Union had a majority was made in good faith and as the making of a bargaining order under the circumstances of this case would clearly not effectuate the purposes of the Act.

Part I

The Bargaining Order.

The propriety of enforcing an order to bargain after a union has lost a representation election depends on the resolution of three questions: (1) whether the Union in fact had a majority; (2) whether the employer refused to bargain because of a good faith doubt of such majority, if the Union had a majority; (3) whether on all the facts of the election situation a bargaining order is an appropriate remedy for enforcing the policy of the National Labor Relations Act.


Did the Union Have a Majority ?

The initial inquiry must, of course, relate to the number of employees in the unit. The Trial Examiner, all of whose findings were adopted by the Board, finds the unit was composed of 197 employees. This included Joan Iaia and Ruby Evans, to the inclusion of whom, says the Trial Examiner, the General Counsel "takes no serious exceptions." Indeed, there was no basis for any objection whatever, as these two women were classified as weavers, they spent most of their time on the floor operating the looms and only a part of their time teaching the others how to operate the looms. The name of Marjorie Krise is apparently omitted, as her name "does not appear on the eligibility list as prepared by the Company for the March 16 election." Mrs. Krise should have been included in the unit. The uncontradicted evidence is that she and her husband had worked in the plant for a long time. In November, 1966 she told the Company "I'd like a layoff for medical and personal reasons." While she considered her personal health a private matter, there is other evidence in the record to indicate that the layoff was due to an allergy she had for silk and silk was then being worked in the plant. In February of 1967 her husband noticed that certain jobs were indicated on the Bulletin Board and she told him that she was interested in going back to work and would he see Mr. Kozak, the Personnel Manager. He saw Mr. Kozak who said he would be glad to see her. This was reported to Mrs. Krise. She saw Mr. Kozak and went back to the plant on February 20th. She had previously worked as a creeler but came back in a different department as an examiner, clearly within the category of a production or maintenance worker. If the fact that her name was not on the eligibility list has any significance, it is sufficient to say that the eligibility list was prepared as of the period "ending February 11, 1967," prior to the time when Mrs. Krise came back to work. As the name of Joyce Jewell, who quit work after the preparation of the eligibility list was eliminated, it is clear that the name of Marjorie Krise should have been included.

Thus the unit becomes 198. The name of Vivian Becker, who was a regular worker but who was laid off temporarily in the early part of February because she had to find a new babysitter to take care of her children while she worked, should also have been included. This brings the total in the unit to 199.

The next consideration is the cut-off date. The Board concedes in footnote 20 on page 23 of its brief that "it does not rely on cards signed after February 14."*fn1 The Trial Examiner does not clearly state the fact that on February 9th, when the initial demand for recognition was made, the Union did not have a majority. But he finds that between February 9th and February 14th "4 additional employees signed representation cards," and he says the Union thus "obtained a majority of 103 cards out of a total of 199 unit employees, even assuming that Becker and Krise are to be included in the unit." This is on the theory that the Union's demand was of a continuing nature.

We hold that under the circumstances of this particular case the cut-off date is February 9, 1967, when the letter claiming a majority was sent by the Union. Since we find, as is disclosed in the ensuing discussion, that the Union had no majority on February 9, 1967, a compelling reason for this ruling is afforded by the fact that Frazier directed a wholesale distribution of copies of this letter at the plant gates on February 10. The intended effect of this widespread diffusion of the Union's false claim that it had a majority was undoubtedly to bring the reluctant sheep into the fold by telling them the fight was over, the Union had won and they might as well get on the bandwagon. No cards handed to the Union after the making of such a misrepresentation could possibly be deemed valid.*fn2

We turn to the cards. During the oral argument of this case we made a request that the cards be sent to us. When they arrived they had been thoroughly shuffled and scrambled. It did not seem possible to arrange them in a meaningful way. But continued study of what appeared on the face, and what appeared also on the reverse side of each card, finally led to a solution which perhaps we should have noted in the beginning. The key to the cards is to be found in the symbol appearing on the reverse side of each card on the right near the top. When these cards are arranged in sequence from 1 to 122, in accordance with the symbols appearing on the reverse side of the cards, we can get a completely dependable factual pattern of the order in which the cards were counted. So that this may be checked by any interested person, we have added as an Appendix to this opinion a complete list of the 122 cards, arranged in the order just above described, together with the data appearing both on the face and on the reverse side of each card, including the date and time of filing with the Board.

The Examiner finds that the 4 additional employees above referred to are represented by cards numbered 101, 96, 100 and 102 and he thus reaches the erroneous conclusion that the Union had 103 cards on February 14, 1967. Card No. 96 is particularly interesting. It is the card of Helen McKendree. The date is "2 1967." It was received at the plant gate on February 10, 1967 at the very time that copies of the Union's letter claiming a majority were being distributed. But it is erroneously given the number 96. It could not properly be counted as constituting one of the majority referred to in the letter of February 9th as the card was not received by the Union until February 10th. By some strange method of computation the Hearing Examiner counted this card as one of the "99 cards" he says were held by the Union at the time of the demand. And he counted this card again as one of the "4 additional employees." The correct number of cards in the possession of the Union on February 9, 1967 was 98.

The other 3 supposedly "additional" cards are also interesting. Card No. 100 was signed by Maury L. Delozier on February 13 but it was not delivered to the Union until February 21. This is after the cut-off date, so we still have only 98. Card No. 101 was signed by John Biancone on February 14 and delivered to the Union on the same day. This was too late; we still have 98. Card No. 102 was signed by Calsie D. Gearhart on February 11 but was not received by the Union until February 13, after the cut-off date of February 9, 1967.

Accordingly, we are compelled to conclude that on the cut-off date of February 9th the Union did not have a majority. And this remains true even if Krise and Becker are not included in the unit.


Are Many of the Cards Vitiated by Deceitful and Fraudulent Misrepresentations by the Union ?

The chief professional union organizer was Carl Frazier, an International Representative of the Textile Workers Union. Working as his lieutenant and next in command was James Meyers. 35 cards were signed at the meeting of January 29, 1967. A few were signed at later meetings sponsored by the Union. Most of the cards were obtained by personal solicitation, which varied from visits to the homes of the workers to the passing out of the cards with or without an explanation of their purpose.

A very considerable number of those who signed the cards testified at the hearing. The result, however, was that the Trial Examiner counted all 122 cards which he characterized as "an overwhelming majority." The way this was done can be described as nothing short of extraordinary. Relying on Cumberland Shoe Corp., 144 NLRB 1268 (1963), enforced, 351 F.2d 917 (6th Cir. 1965) and Joy Silk Mills, Inc. v. NLRB., 87 U.S. App. D.C. 360, 185 F.2d 732 (1950), the Trial Examiner held that unless a card signer had been told that the "sole" or "only" purpose of the card was to obtain an election, the signing of the card was a sufficient demonstration of an intention to appoint the Union as bargaining agent and that there was thus established an irrebuttable presumption which could not be neutralized by any testimony by the employee as to what he or she understood by the various representations made by Frazier or the other Union solicitors. In one or two instances where the testimony indicated that the representation was that the "sole" or "only" purpose of the cards was to get an election, the Trial Examiner accepted these cards also, as he found the testimony not credible.

We turn first to the 35 cards signed at the meeting of January 29th. Frazier himself testified that he read the entire printed matter on the card, word for word, and that he made the following representations at the meeting of January 29, 1967: (1) if the Union lost the election the cards would be returned; (2) that the Union must have 30 per cent "of the people" before the Union can petition for an election; (3) "there has to be 51 per cent of the people vote for a Union." There was considerable testimony by employees to the effect that they were told that by signing the cards they would save $5. This seems to have been on the theory that, as no payment whatever was necessary to validate the card, they would save the payment of the initiation fee or dues generally required. What Frazier omitted to tell those present at the meeting is similarly established by Frazier's testimony that he did not tell those present that, even if the Union lost the election, it could still demand recognition and the right to bargain upon the basis of the cards. That he knew this to be so is clear from his testimony that, while he made no such statement at this particular meeting, he did make such a statement at other meetings. We think these flagrant misrepresentations and this wilful omission were deceitful and that the effect of making them was to perpetrate a fraud on those present at the meeting who signed the cards.

While none of the employees was permitted to testify to what these misrepresentations meant to him, we think the inference is perfectly plain. Each man present at the meeting must have concluded: "we employees are not accepting Union membership unconditionally. If there are enough cards to get an election, and an election takes place, I can vote for the Union or against the Union as I choose. And, if the Union wins, I save $5. If the Union loses, that is the end."

Frazier was especially emphatic in insisting that he had never said to anyone, at the meeting or anywhere else, that the "sole" or "only" purpose of the cards was to obtain an election.

Thus, because of these flagrant misrepresentations and this wilful concealment, we have no alternative other than to invalidate the entire 35 cards signed at the meeting of January 29th.

Against this background it is, we think, of no significance that none of the signers of any of the cards demanded the return of his card by the Union. The ex parte action of the Union in sending union membership cards and union literature to each person who signed a card is likewise of no significance in the light of the representations made by Frazier.

To cover the matter of the cards more thoroughly we specifically invalidate the cards of six employees. Three of these, Jonas Corbin, Jr., William Slone (whose card was erroneously recorded by Frazier as Stone) and Walter Delozier, attended the meeting on January 29, 1967. The other three, William Nolan, Ronald Taddy and Patrick O'Hara, so far as appears, did not attend the meeting of January 29, 1967.

Jonas Corbin, Jr. was an active supporter of the Union who, after signing his card at the meeting, distributed cards to other employees and urged them to sign for the Union. He was asked what Mr. Frazier said at the meeting:

A. Mr. Frazier said that the cards were -- that we were signing the cards so that we could get an election down at the plant.

Q. Did you ask any questions? A. Yes, sir.

Q. What was the question you asked? A. I asked why, I asked why it said on the card that we were signing to become a member of the Union; I asked whether we were actually a member of the Union, were they going to collect dues from us if the Union wasn't voted in and Mr. Frazier then told me, he said, "No, you will get your card back if the Union isn't voted in."

Q. Did he answer your question in any other way? A. To the best of my recollection, all he wanted was to get 30 per cent of the cards signed, 30 per cent of the people to sign blue cards so we could get an election.

He also testified that after the meeting as people were picking up and signing the blue cards, "the word came to me" that the people signing before the election "would save five bucks."

His understanding of what the cards meant is demonstrated by his statement, in turn, to those ten people to whom he distributed cards:

Q. Did you tell them anything about the purpose of the cards or what they meant? A. I told them that we had to sign 30 per cent of the people in the plant before we could even get an election and get the thing over with one way or another.

Clearly, the expectation that Corbin generated and that Frazier had generated in Corbin was that there would be an election to "get the thing over with one way or another." If the Union lost, the cards would be returned and no dues would be owed; if it won, an early signing would have saved five dollars. Signing the cards was meant to bring an election. To gain signatures by telling the employees that there would be an election, without also telling them that the cards alone might be used to gain representative status, is a sufficient misrepresentation to invalidate the cards. When the employees were told, in effect, that they had nothing to lose by signing and could, by signing, save money and get an election to "get the thing over," this indicates that there was no intention to unconditionally authorize the Union as the representative of the workers.

William Slone attended the meeting and signed his card there. He testified that at the meeting "they said they needed 30 per cent of the cards to have an election," also that by signing the card the initiation fee would be saved. He specifically remembered Frazier stating: "if the Union was not voted in, that these cards would be returned to you in the mail." In obvious reference to the election, he recalled that Frazier had said: "We need cards to get the ball rolling."

Walter Delozier recalled that when Frazier was asked at the meeting about the language on the cards that says "you belong to the Union when you sign it," he replied: "This is just to get the show on the road, so we can get a vote in your plant." When pressed on cross-examination he recalled an even stronger statement:

Q. What did Joness [sic] Corbin say at the meeting that you attended? What questions did he ask Frazier? A. He stood up and said, "I have a question" and he said, "O.K.," and he said, "Is this card just to get a vote in the plant or company?" He said either one, I don't know which.

Mr. Frazier said, "Yes, it is." But it doesn't say that on the card. Then he explained that it only takes 33 per cent of these cards to get a vote and the question was dropped right there.

As Delozier testified succinctly: "I read the card but I took Frazier's word."

When we turn to the testimony of employees who did not sign at the meeting of January 29, 1967, we find the same pattern of misrepresentation, half-truth and evasiveness by the Union organizers.

William Nolan had signed a card at his home. When asked what Harry McGraw, who had given it to him, said, he replied:

A. He said they had to have a certain percentage to join the Union, to get a Union started.

Q. Did he say anything about an election? A. Yes, he said there would be an election.

He also recalled that he had been told that the Union needed 30 per cent of the cards to get the Union started and bring about an election. The single, positive representation that there would be an election, without any indication that cards alone could bring in the Union without or despite an election, is sufficient to invalidate this card.*fn3

Ronald Taddy was given a card by James Meyers, Frazier's assistant. When he asked Meyers about the card, Meyers replied that they had to have 30 per cent to have an election. When pressed on cross-examination, as to whether he had been told that signing the card "would help you get the Union," he replied instead that "It would help us get an election." He testified that Meyers had said nothing to him about dues but that "it was rumored around the mill --" and then he was cut off.

Patrick O'Hara was told:

A. Well, it would save you the first year's fee and that they would use the card to get the majority of the cards signed, you know, but it ...

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