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J. J. Newberry Co. v. National Labor Relations Board

decided: April 28, 1971.


Hays and Feinberg, Circuit Judges, and Curtin, District Judge.*fn*

Author: Feinberg


J. J. Newberry Co., Inc. petitions for review of a National Labor Relations Board order which found that the company suspended a system of wage review during a union organization campaign in violation of sections 8(a)(3) and (1) of the National Labor Relations Act and both interrogated an employee and threatened to close a warehouse if the employees chose the union in violation of section 8(a)(1) of the Act. The Board cross-petitions for enforcement of its order. For the reasons set forth below, we decline to enforce the Board's order.


The alleged violations with respect to suspension of wage review during the union campaign arose in the following context. Prior to the campaign, the company had an established policy of periodic performance review at its Omaha, Nebraska warehouse.*fn1 An employee was first reviewed approximately 30 days after employment to determine whether he was progressing satisfactorily and whether he should be reassigned to a new job. No changes in his wage rate were made at this time. Thereafter, the company reviewed the work performance and wage rate of each employee every six months, although the timing might vary by several months. Wage increases were based on merit and were therefore neither automatic nor uniform, although it appears that an employee who performed his work satisfactorily could reasonably expect a wage increase after the six months review. If no increase were forthcoming, an explanation would be given.

On May 1, 1969, the General Drivers & Helpers Union, Local 554*fn2 sent a letter to Newberry announcing its organization campaign at the warehouse. The letter asserted that the union would file a petition for election as soon as it received sufficient employee support and stated that:

You are further advised that, pursuant to the National Labor Relations Act, as amended, during the period of organization of employees, an employer may not discriminate against such employees as to terms and tenure of employment because they desire to form, join or assist a labor organization. If any such discrimination occurs, prompt action will be taken by the Union filing unfair labor practice charges with the National Labor Relations Board for violation of any of the protected rights of employees under the Act. We hope this will not be necessary, and that during this period the rights of all parties will be protected.

Upon advice of counsel, warehouse manager Edward Romine posted a copy of the letter on the employee bulletin board and suspended the wage review system. In several cases he told employees that they deserved wage increases but that he was unable to grant increases until the union issue was settled.

On this factual basis the Board found that the company had violated sections 8(a)(3) and (1) of the Act and ordered the company to make whole all employees for any loss suffered by suspension of wage review. It reasoned that the company's well-established duty was to decide the question of granting or withholding benefits as if there were no organizational activities pending:

An employer's legal duty in deciding whether to grant benefits while a representation case is pending is to determine that question precisely as he would if a union were not in the picture. If the employer would have granted the benefits because of economic circumstances unrelated to union organization, the grant of those benefits will not violate the Act. On the other hand, if the employer's course is altered by virtue of the union's presence, then the employer has violated the Act, and this is true whether he confers benefits because of the union or withholds them because of the union.

McCormick Longmeadow Stone Co., 158 N.L.R.B. 1237, 1242 (1966). The Board also suggested that the company's statements that wage review would have to be held in abeyance until the union issue was settled sought to place responsibility for the hiatus in wage review on the union, and thereby attempted to discredit the union and discourage membership.

One weakness in the Board's argument lies in its assumption that the company would necessarily have protected itself by conducting its normal wage review. The company correctly points out that the Board's own position on this issue is hardly as clear as the language quoted above might indicate. In J. C. Penney Co., Inc., 160 N.L.R.B. 279 (1966), enforced, 384 F.2d 479 (10th Cir. 1967), for example, the company normally granted wage increases at 12-15 month intervals. Nevertheless, the Board adopted a finding of the trial examiner that a wage increase 14 months after the preceding one violated section 8(a)(1) of the Act:

With a decision in the representation case imminent and the possibility of an election soon thereafter a matter of reasonable expectation, I find it hard to understand why the Respondent felt impelled to grant the wage increases at the time it did. As matters actually developed, had the Respondent withheld action for another month, the election would have been held and the Respondent would have been held and the Respondent would have granted the wage increases within the span of time it customarily followed. . . .

160 N.L.R.B. at 284. Such a holding contrasts sharply with the Board's position in other cases, e.g., Montana Lumber Sales, ...

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