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National Labor Relations Board v. Vault


October 1, 1969


Author: Waterman

Before WATERMAN, SMITH and KAUFMAN, Circuit Judges.

Petition by National Labor Relations Board to enforce an order requiring respondent to cease and desist from certain unfair labor practices and to bargain with a union. The Board's decision and order are reported at 170 NLRB No. 99. Enforcement fully granted, Judge Waterman dissenting from enforcement of that portion of the order requiring respondent to bargain prior to a Board-conducted representation election.

WATERMAN, C. J.: This is a petition by the National Labor Relations Board to enforce its order of March 29, 1968, against respondent Marsellus Vault & Sales, Inc. The Board, agreeing with its Trial Examiner, found that the Company violated Section 8(a)(1) of the National Labor Relations Act by coercively interrogating employees about their union activities; by threatening to close the plant if the Union came in; by inducing employees to withdraw their support of and membership in the Union; and by urging employees to form their own union rather than joining a local of the Teamsters. The Board also adopted the Examiner's finding that the Company violated Section 8(a)(5) and (1) of the Act by refusing to bargain with the Union after it had been designated as the bargaining agent of the Company's employees in an appropriate unit.

The Board's order requires the Company to cease and desist from engaging in the unfair labor practices so found and from interfering with employee rights in any like or related manner. Affirmatively, the Company is required to bargain with the Union upon request and to post appropriate notices.

A majority of this court grants full enforcement of the Board's order. I, however, do not consider a bargaining order appropriate in the circumstances of this case and therefore I do not concur in that portion of our result in which we grant enforcement of the bargaining order.

Respondent is engaged in the manufacture and sale of funeral supplies. Its principal place of business is in Syracuse, New York, but the present dispute concerns its small plant in Mexico, New York. During the period in question, March 26, 1967 through April 13, 1967, there were seven employees in the Mexico Plant. One of these, William Roberts, acted as the plant manager, a position he had held for several years prior to this time. His immediate supervisor was respondent's personnel director, Richard Perschel, whose office was in Syracuse but who normally visited Mexico twice each week.

On March 27, 1967, a meeting was held in a neighborhood tavern between all the Mexico employees, excluding Roberts, and James Parry, vice president of the Dairy and Bakery Salesmen and Dairy Employees Union, Local 316, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America (hereinafter the Union). At this meeting, Parry distributed "Application for Membership" cards in the union. See Appendix to this opinion [Appendix omitted. - CCH.]. These cards both designated the Union as the signer's collective bargaining representative and authorized the employed to deduct union dues from the employees' monthly wages. The last sentence on each card stated that the authorization and application were not to be applicable "until 30 days after the date hereof." The purpose and the meaning of the cards were carefully explained to the employees and each one of the six signed a card.

The next day the Union's president, Patrick F. Shanahan, sent a letter to John Marsellus, respondent's president, stating that the Union had possession of signed authorization cards from all of the employees in the Mexico plant, and that an inspection of the cards could be arranged. Marsellus was also requested to begin bargaining with the Union immediately. On April 3, a reply was sent to the Union stating that the Company was in favor of having the representation question settled by a Board election. No mention of a card check was made.

In the intervening period, Perschel had visited Mexico and had stated to Tony DeMarko, a senior employee, in the presence of co-workers, "How come you went for outside help?" He also said to Lester Wood, another employee, ". . . if you had any problems, why didn't you come to me with them?" At the same time that he made this latter remark, Perschel told Wood he wanted his and DeMarko's keys back since they were given to the employees by Roberts; and if anything happened "because of the union deal," Roberts would be responsible. A half hour later he himself reissued the returned keys to DeMarko and Wood.

On April 5th both Perschel and Marsellus visited Mexico. They told all employees that Roberts was retiring for health reasons and that Tony DeMarko was to be the "new boss," though Roberts was to stay on until April 14 to assist DeMarko in his new duties.

Later that same day DeMarko had a conversation with several employees. Exactly what he said and how he said it was in dispute before the Trial Examiner. Two employees, testifying for the General Counsel, stated that DeMarko quoted Marsellus as having said that he would close the plant before a union got in and that if the employees stuck behind him, DeMarko, they "would go places." DeMarko and another employee stated that the first remark was made in a friendly, non-threatening manner during one of many conversations the employees had about the Union; and that it came in response to a remark that the employees should demand $2.25 per hour and was not said in response to anything said by anybody about the Union. In addition to these remarks, it is undisputed that DeMarko was trying to convince the other employees to withdraw their applications to the Union at this time in order to save the price of the union dues, $6.00 per month. Indeed, on April 6, he posted on the plant bulletin board a withdrawal letter drawn up by his wife the night before and he urged several of the employees to sign the letter in order to save money. Eventually, all of the employees did sign up to withdraw their applications except DeMarko. See footnote 6, infra .

In rebuttal to the above, DeMarko testified that prior to April 5 he had taken part in discussions about withdrawal from the Union and that he favored doing so prior to his promotion. Two other employees stated that they, too, had favored withdrawal prior to April 5 and that the question was a topic of conversation in the plant throughout this period.

On April 12, the Union met with Marsellus to arrange for a consent election. The meeting was unsuccessful, however, and on the following day the instant unfair labor practice charges were filed.

The 8(a)(1) Violations.

The first alleged 8(a)(1) violations are Perschel's remarks to several of the employees and the request for the plant keys of two of them even though the keys were later returned. The Board characterized these actions as unlawful interrogations. We cannot agree, inasmuch as we find them to be lawful under the standards set by us for judging whether interrogations are unlawful. Bourne v. NLRB , 332 F.2d 47 (2 Cir. 1964) (per curiam ). We note that these questions were more rhetorical than informational - Perschel did not wait for a reply; and they were asked at the employees' work stations, not in the office of the management representative. Much more formal interrogations seeking the type of information requested by a literal reading of Perschel's remarks were held not to violate the Act in this court's recent decision in The Schwarzenbach-Huber Co. v. NLRB , 408 F.2d 236 (1969).

We do feel, nevertheless, that Perschel's remarks clearly expressed company displeasure with the employees and some measure of hostility toward the Union. Furthermore, the incident involving the keys could easily have been interpreted to express a new employer attitude of reduced trust and increased strictness toward the employees. Thus, these remarks, while not in themselves an illegal interference with the employees' § 7 rights, do add significance to the later unfair labor practices which must be viewed in this context.

The principal alleged 8(a)(1) violations involve the actions of DeMarko from April 5 onward. A threshold question here is whether in fact DeMarko was a management representative at this time.*fn1 This point was vigorously contested before the Trial Examiner. The respondent contended that Roberts was still the plant manager until April 14 and that DeMarko was just "learning the ropes." The General Counsel on the other hand tried to show that DeMarko was the "boss" as of April 5 and that Roberts remained just to assist him. There were significant indicators brought out by both sides. Nevertheless, the Board's conclusion must be upheld if supported by substantial evidence taken on the record as a whole, Universal Camera Corp. v. NLRB , 340 U.S. 474 (1951), and that standard is clearly met here.

The General Counsel's chief witness on this matter was Roberts himself who testified that he drove a truck during most of this period, work he did not normally do prior to April 5; that DeMarko performed the supervisory tasks of filling out drivers' orders and filing the plant's weekly report for the week of April 9-13; and that he, Roberts, just "was there to assist DeMarko if he had any questions." Several other employees also testified to seeing DeMarko perform supervisory tasks during this period though he did punch the time clock until April 7.*fn2 Adding this testimony to the undisputed evidence that Marsellus announced on April 5 that Tony DeMarko was the "new boss" and that Roberts was staying on until April 14, we find that substantial evidence supports the Board's conclusions that DeMarko was a management representative at the time he committed the alleged unfair labor practices.

We also hold that there is substantial evidence in the record taken as a whole to support the Board's findings that DeMarko violated § 8(a)(1) by threatening that the plant would close if the Union came in, e.g., Textile Workers Union of America v. Darlington Co ., 380 U.S. 263, 274 n. 20 (1965); NLRB v. Milco, Inc ., 388 F.2d 133, 136-137 (2 Cir. 1968); by promising benefits if the employees "stuck with him," e.g., Edward Fields, Inc. v. NLRB , 325 F.2d 754, 760 (2 Cir. 1963); and by persuading them to withdraw from the Teamsters Local so as to form a union of their own, e.g., Medo Photo Supply Corp. v. NLRB , 321 U.S. 678, 683-684 (1944); Irving Air Chute Co. v. NLRB , 350 F.2d 176, 179-180 (2 Cir. 1965). Admittedly, the testimony of employees Schenck and Burnham on these matters was disputed by DeMarko and employees Wood and Skilinskis; but the credibility of a witness is in general a determination to be made by the Trial Examiner and the Board, and there is no overriding evaluation of all the testimony to warrant us in disregarding their conclusions in this case. We especially note the tesimony of Schenck to the effect that he felt his job would be in jeopardy if he did not sign the withdrawal letter.

The § 8(a)(5) Violation.

In addition to the § 8(a)(1) violations outlined above, the Board found that the respondent violated § 8(a)(5) of the Act by refusing in bad faith to bargain collectively with the Union when the Union represented a majority of the employees as shown by the authorization cards. Union representations that by card count a majority of employees are union members and employer representations that employers in good faith doubted the existence of the claimed union majorities are not new to this court. The results we have reached in each case have, of course, depended upon the circumstances of each case. E.g ., compare Schwarzenbach-Huber Co. v. NLRB, supra , with Irving Air Chute Co. v. NLRB, supra . We need not decide the issue of the employer's good faith in this case because we have formerly held that "lack of good faith doubt is immaterial if in fact no majority exists," NLRB v. S. E. Nichols Co ., 380 F.2d 438, 442 (2 Cir. 1967).In the present case, no majority did in fact exist for the union authorization card which all the employees signed provided on its face that it was not to be effective for 30 days.*fn3 Therefore, when the Union wrote Marsellus on March 28 requesting that bargaining begin immediately it was not the employees' collective bargaining representative. In such circumstances, no § 8(a)(5) violation could have been committed irrespective of the reason behind the employer's refusal.

The appropriateness of the bargaining order.

The question of whether the bargaining order imposed on the respondent by the Board should be enforced has divided this division of the court. The majority are of the belief that despite the absence of a § 8(a)(5) violation because the Union technically lacked an effective majority at the time it requested bargaining it would be appropriate for us to enforce the Board's order to bargain. Immediately before the Company began its § 8(a)(1) violations, the Union had what might be called an incipient majority; all the employees in the unit had signed authorization cards which were to become effective in 30 days. Thus it seems to the majority quite certain that, had the Company not interfered, the Union's authorization would have ripened after a short time, but that DeMarko, who they found upon promotion suddenly switched from a staunch supporter of the Union to an equally vigorous opponent, took it upon himself to change that course of events by persuading, cajoling, and threatening the employees into withdrawing their support from the Union.

We have recognized, of course, that a bargaining order in the absence of a § 8(a)(5) violation is "strong medicine," NLRB v. Flomatic Corp ., 347 F.2d 74, 78 (2 Cir. 1965). Nevertheless, the majority believes that the "strong medicine," of a bargaining order is appropriate here in light of the extent of the Company's anti-union campaign carried forward by DeMarko. See, e.g., Bryant Chucking Grinder Co. v. NLRB , 389 F.2d 565 (2 Cir. 1967), cert. denied , 392 U.S. 908 (1968); NLRB v. Consolidated Rendering Co ., 386 F.2d 699 (2 Cir. 1967); NLRB v. Gotham Shoe Mfg. Co ., 359 F.2d 684 (2 Cir. 1966). The standard recently stated by the Supreme Court is that:

"If the Board finds that the possibility of erasing the effects of past practices and of ensuring a fair election (or a fair rerun) by the use of traditional remedies, though present, is slight and that employee sentiment once expressed through cards would, on balance, be better protected by a bargaining order, then such an order should issue . . . ." NLRB v. Gissel Packing Co., Inc ., 395 U.S. 575, - (1969).

The Court also pointed out that "we have held the Board has the authority to issue a bargaining order even where it is clear that the union, which once had possession of cards from a majority of the employees, represents only a minority when the bargaining order is entered. Franks Bros. Co. v. NLRB , 321 U.S. 702 (1943)." Id . at - . Later in the term the Court also vacated, 395 U.S. 828 (1969) four Court of Appeals decisions, including that of the Second Circuit in NLRB v. Pembeck Oil Corp ., 404 F.2d 105 (2 Cir. 1968), and remanded them for further consideration in light of Gissel .

My brothers believe that the showing of future bias required by Gissel is met in this case, despite the Company's representation that a bargaining order would be unduly harsh in view of the fact that only one of the employees employed at the time of the unfair labor practices now works at the plant. First, in a plant as small as the one involved in this case they believe it very likely that the taint of the Company's anti-union activities will remain in the atmosphere after the membership in the bargaining unit has changed. Thus they have little doubt but that the new employees know all about DeMarko's past victory over the Union. Moreover, they note that one of the primary purposes of a bargaining order in these circumstances is to deprive the employer of the fruits of his illegal activity and if we were to hold that a significant turnover in the composition of the bargaining unit subsequent to the company's anti-union activity will always make a bargaining order inappropriate, this purpose would be frustrated. They believe that this case should be governed by the approach adopted in NLRB v. Philamon Laboratories, Inc ., 298 F.2d 176, 182-183 (2 Cir. 1962) (Marshall, J.), cert. denied , 370 U.S. 979 (1962):

The union lost majority status because of respondent's violations of the law. The only effective remedy left in the present case is the requiring of recognition. And, indeed, as far as future cases are concerned, a denial of power to the Board might well encourage employers to refuse to bargain, commit the ancillary violations, fight the unfair labor practice charges to the courts, and then rely upon the inevitable intervening turnover in personnel to ward off the only effective remedy remaining. In any case, we cannot say such a rationale may not be adopted and applied by the specialized agency entrusted by Congress with the principal enforcement duties under the Act.

And, finally, they would point out that, of course, if the employees do not really wish to be represented by the union they have the option of petitioning for a decertification despite the bargaining order.

I disagree with my brothers as to the appropriateness of a bargaining order in this case. I am not convinced that the unfair labor practices committed by DeMarko even when added to Perschel's comments, were so hostile to the organizing efforts of the Union that a fair and impartial Board election is not now possible. NLRB v. Gissel Packing Co., Inc., supra . I concur in the conclusion that DeMarko's actions constituted serious violations of the Act. However, that alone is not sufficient under the circumstances here to set aside a standard that I consider equitable, the standard of whether it is possible to conduct a fair election. I am convinced that such an election is possible at this little plant.

The inappropriateness of the bargaining order my colleagues enforce is underscored by the fact that the Union will be the bargaining representative of a group of employees of whom only one had worked at this plant during the period in question and had had union contact. Certainly I agree with the policy propounded by Justice Marshall, my former colleague, quoted above, that an employer should not be permitted to cause the dissipation of a union's majority and then hope that the passage of time will create so large a turnover of employees that a bargaining order will not be imposed. But as I wrote for the court in NLRB v. Better Val-U Stores of Mansfield , 401 F.2d 491, 495-496 (2 Cir. 1968), quoting from Flomatic, supra , the policy of Congress (and I submit it is an overriding policy) is that all employees are to be guaranteed the freedom to choose whether they wish unionization and union representation and this freedom of choice should not be unnecessarily undermined.By imposing a bargaining order upon the present employees of this employer the freedom of choice of all the present employees (except perhaps one) will be denied them.

I do not mean to imply by the above that we should never enforce a bargaining order when there has been a large percentage turnover of employees during the time the issues of alleged unlawful labor practices are being litigated. I do believe, however, that we must be extremely mindful of the clearly expressed congressional policy favoring individual employee freedom of choice through the casting of ballots in Board conducted representation elections. If we focus principally upon the bygone acts of the employer in relation to former employees and not on the present atmosphere in the employer's plant we can easily abridge the rights of the present employees to freedom of choice, while we were intending only to punish the employer for past abuses. In the present case, while the past anti-union campaign was in a sense extreme in that it was so successful in so short a period of time, I suggest that this very brevity together with the fact that the campaign did not involve the higher levels of company management have left a situation where a fair election is possible now.*fn4

Further, I must say that I have always been aware of the smallness of the unit involved here, and by the fact that all the employees in the unit were social friends.*fn5 I would think it exceedingly difficult under these circumstances for even a trained Trial Examiner to determine how the other five employees viewed DeMarko, even after he was announced as the "new boss," and to determine the effect his actions had on the individual decisions of each of these social friends to withdraw from the Teamsters' Local.

It is undisputed on the record that the Union was a common topic of conversation among all of these men and there was testimony that even prior to April 5 DeMarko and others had discussed withdrawal from the Union in order to save the payment of union dues. Seen in this light, it is conceivable that DeMarko's remarks did not have the coercive effect attributed to them by the Board for he would presumably remain the friend of his co-workers even after being named their "boss." Also, his preparation and circulation of the withdrawal petition*fn6 could well have been activated by the anti-union beliefs I find he had expressed while an employee prior to promotion. This is not to say that the part he played in ousting the Union coupled with his statement that the employees should stick with him and his repetition of Marsellus's threat to close the plant were not violations of the Act. Examining the most damaging testimony on this question we find first, Burnham admitted that DeMarko's plant shut-down statement was not made in a threatening tone of voice, and that he overheard the remark in passing as he was not a participant in the conversation during which DeMarko made it; second, though Schenck testified that he feared for his job at one point, his testimony was somewhat confused and equivocal:

Q. And did you voluntarily sign that petition? A. Well, nobody twisted my arm. I signed it. . . . .

Q. (By Mr. Kopp) When did you sign it? A. In the morning, he started talking about this paper and he said I'll bring it in this afternoon. He said I would like everybody to sign it before the 13th. And I wasn't going to sign it. And I told Burnham, you know, if - I said I don't think the paper means anything, you know. I'm not a lawyer. I said if it does and I don't sign it, I'm not the only one that signs it, well, I'll just get fired, you know. And I was going to sign it, and after that I was going to give him the two weeks' notice, you see, I was going to give him two weeks' notice, because if I didn't sign it, then I figured I would get fired right off and I would give him two weeks' notice that Friday and quit.

Q. Did Mr. Perschel say you would be fired if you didn't sign the petition? A. No.

Q. Did Mr. John Marsellus say you would be fied if you didn't sign the petition? A. No.

Q. Did Mr. Roberts tell you you would be fired if you signed the petition? A. No.

Q. Did Tony tell you you would be fired if you didn't sign the petition?

A. No.

Q. Did anyone tell you that you would be fired if you didn't sign the petition?

A. No.

And finally I think it important to note that two employees in addition to DeMarko testified that they had favored withdrawing from the Union at this time without having been urged to do so by DeMarko. Indeed, one of them had volunteered to compose a withdrawal letter not knowing that DeMarko had already done so. This circumstance does not detract from the fact that DeMarko committed the § 8(a)(1) violation, but it does indicate that if two of the remaining five employees in the unit at this time were disposed to withdraw from the Union without any urging from DeMarko or without any employer pressure being applied to them, it would be unreasonable to impose the Union upon the new employees presently working at the plant who have never had an opportunity to choose whether they wish the Union.

In conclusion, I reiterate that I do not wish to minimize the findings of unfair labor practices in the present case. However, the campaign was short, a low-level management representative waged it and this representative was both a social friend of the other employees and reportedly an anti-union instigator prior to his becoming part of management, several other members of the little unit of employees were also anti-union, and only one of the employees involved in the card signing now remains with the Company. I would hold it to be improper for this court to enforce the bargaining order. I find nothing in this record to indicate that there is any likelihood that the 80% turnover in plant personnel is in any way attributable to the employer's 1967 anti-union activities, or that at this time a fair and impartial election under Board auspices cannot be conducted. I would order such an election. To proscribe an election here is to disregard the freedom of choice Congress guaranteed the present employees.

A majority of the court grants enforcement of the Board's order in its entirety, one judge dissenting to the enforcement of that portion of the order that requires the respondent to cease and desist from refusing to bargain with the Union.

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