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

decided: March 31, 1981; As Amended May 21, 1981.

J.J. NEWBERRY CO., A WHOLLY OWNED SUBSIDIARY OF MCCRORY CORPORATION, PETITIONER,
v.
NATIONAL LABOR RELATIONS BOARD, RESPONDENT .



Petition for review and cross-application for enforcement of a decision and order of the National Labor Relations Board finding the employer, J.J. Newberry Co., to have committed unfair labor practices prior to a union representation election which resulted in a tie vote and ordering the employer to cease and desist from these practices, to post notices, to make employees whole for certain lost wages, and to bargain with the union. Order enforced in part and vacated in part. Case remanded to Board for a rerun election.

Before Moore, Mansfield and Mulligan, Circuit Judges.

Author: Mansfield

J.J. Newberry Company ("the employer") proceeding under § 10(f) of the National Labor Relations Act as amended, 29 U.S.C. §§ 151 et seq. ("the Act"), has petitioned for review of a decision and order of the National Labor Relations Board. The Board in turn has filed a cross-application for enforcement of its order under § 10(e) of the Act. The Board's decision and order, reported at 249 N.L.R.B. No. 126, found that the employer had committed certain unfair labor practices during the course of an organizational campaign conducted at the employer's Green Acres store in Valley Stream, Long Island, by Local 1102, Retail, Wholesale, Department Store Union, AFL-CIO ("the Union"). The campaign led to a Board-supervised election among the Green Acres store employees, resulting in a 44-44 tie vote. The order requires the employer to cease and desist from the unfair labor practices, to post notices, to make whole all employees who lost earnings as a result of what the Board determined was an unlawful withholding of a planned wage increase and, finally, to recognize and bargain with the Union.

The employer challenges the Board's finding that it committed unfair labor practices. It also contends that the Union's majority showing was tainted by the use of supervisory employees to obtain authorization cards and that a bargaining order is not an appropriate remedy. With the exception of the withholding of the preplanned wage increase we find the Board's unfair labor practice determinations to be supported by substantial evidence. The cease and desist and notice aspects of the order are therefore enforced to that extent. The requirements that the employer make whole the employees for lost wages and bargain with the Union are, however, improper. The bargaining order is vacated and the case remanded to determine whether a rerun election is appropriate.

The employer operates numerous retail department stores throughout the country. In July of 1977, the Union began an organizing campaign at the employer's Green Acres store. The bargaining unit at the store consisted of about 105 employees and by August 3, 1977, the Union had obtained signed authorization cards from 73 of those employees. On the basis of this showing the Union petitioned for a representation election. Approximately 34 of the 73 cards had been collected by two individuals named Muriel Hirst and Diane Puglia. The employer, believing these two women to be supervisors, moved on August 12, 1977, to dismiss the election petition on the ground that the Union's showing of interest was tainted by supervisor-participation. This motion was eventually denied by the Regional Director and then by the Board. The election was held on October 28, 1977, with the direction that the votes of Hirst and Puglia be challenged and their supervisory status determined in a post-election hearing if necessary. The result was a 44-44 tie vote.

After the election the Union filed objections and unfair labor practice charges alleging that the employer violated the Act by having granted a wage increase some three weeks before the election and by various instances of interrogation, solicitation of grievances and accusations of disloyalty. A hearing was held before an administrative law judge (ALJ) during which the Union's complaint was amended by the Regional Director to add an allegation that the employer had improperly withheld a wage increase. The ALJ found that certain conversations which the Green Acres store manager, Mr. Sweetser, and other higher level company officials had had with employees Rosenburg, Caraprese and Hayes violated § 8(a)(1) and that the employer had also violated § 8(a)(1) by unlawfully granting a wage increase prior to the election. However, the ALJ also found that Hirst and Puglia were supervisors, that the withholding of the wage increase had not been unlawful and that a bargaining order was not warranted.

Upon review a three-member panel of the Board agreed with the ALJ as to the minor § 8(a)(1) violations and the unlawful grant of a wage increase. All three members, however, held that the ALJ had erred in finding that Hirst and Puglia were supervisors and that the withholding of the wage increase had been proper. A two-member majority then concluded that a bargaining order was required. Member Penello, agreeing with the ALJ, dissented from this aspect of the Board's ruling.

The wage increase dispute, which is the linchpin of the Board's case, stemmed from a decision made by the employer in July of 1977, before the beginning of the Union's organization drive, to raise wages at all Long Island stores. The decision was prompted by an expected rise in the minimum wage (which it had always been the employer's policy to anticipate) and by the fact that the employer had opened a new Long Island store in Holbrook where the company found it necessary to pay higher wages to attract employees, which led employees in other Newberry stores to expect comparable increases. No fixed date for the implementation of the wage increase at the Green Acres store was set, but it was expected to occur during August.

Both sides agree that the decision to increase wages had been made by the company without regard to any union considerations. The controversy revolves around the timing of implementation. The employer, on the advice of counsel, did not grant the increase in August or September, since its motion to dismiss the election petition was pending before the Regional Director. On October 3, 1977, after being informed that the Regional Director had upheld the Union's showing of interest and had directed that an election be held on October 28, 1977, counsel advised management that the wage increase could be implemented at the Green Acres store. On October 6, 1977, Vice-President Elliott visited the Green Acres store and in the context of what the Board and the ALJ describe as an "anti-union" speech, announced the wage increase. The speech itself was not found to be an unfair labor practice.

Discussion

1. The Unfair Labor Practices

The Board's finding, in agreement with the ALJ, that management's interrogation and solicitation of employees Rosenburg, Caraprese and Hayes amounted to § 8(a)(1) violations is supported by substantial evidence. However, for reasons noted infra, these violations were minor and would in no event support a bargaining order or an award of back pay. Although the question is a close one, substantial evidence also supports the Board's acceptance of the ALJ's conclusion that the timing of the employer's eventual announcement and grant of the wage increase was a violation of § 8(a)(1), even though the employer's initial decision to raise wages was perfectly legitimate. The Board's conclusion, which disagreed with the ALJ, that the employer's previous withholding of the increase violated §§ 8(a)(1) and (3), however, is not so supported.

Having previously decided to increase wages, the employer in August 1977 was in the position of being forced to tread on eggshells, being caught in a potential "damned if you do, damned if you don't," situation. NLRB v. Dorn's Transportation Co., 405 F.2d 706, 715 (2d Cir. 1969). The predicament is one in which the employer's motives play an important part in judging the legality of its actions.

"Employers, with some justification, have argued that there is a potential for confusion and unfairness in rules that may make it illegal, on the one hand, to withhold and, on the other hand, to grant, a wage increase. But neither course has been declared illegal per se. It becomes so only if the employer is found to be manipulating benefits in order to influence his employees' decision ...


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