110 F.3d 268 (5th Cir. 1997), 96-60130, Trencor, Inc. v. N.L.R.B.

Docket Nº96-60130.
Citation110 F.3d 268
Party NameTRENCOR, INC., Petitioner-Cross-Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent-Cross-Petitioner.
Case DateApril 08, 1997
CourtUnited States Courts of Appeals, United States Court of Appeals (5th Circuit)

Page 268

110 F.3d 268 (5th Cir. 1997)

TRENCOR, INC., Petitioner-Cross-Respondent,

v.

NATIONAL LABOR RELATIONS BOARD, Respondent-Cross-Petitioner.

No. 96-60130.

United States Court of Appeals, Fifth Circuit

April 8, 1997

Page 269

Laura M. Franze, Michael Brett Burns, Akin, Gump, Strauss, Hauer & Feld, Dallas, TX, for Trencor, Inc.

Aileen A. Armstrong, Deputy Associate General Counsel, Frederick C. Havard, Angela Michelle Washington, National Labor Relations Board, Washington, DC, Michael Dunn, Director, National Labor Relations Board, Fort Worth, TX, for N.L.R.B.

Petition for Review and Cross-Application for Enforcement of an Order of the National Labor Relations Board.

Before REYNALDO G. GARZA, JONES and DeMOSS, Circuit Judges.

EDITH H. JONES, Circuit Judge:

Trencor, Inc., a manufacturer of heavy construction equipment petitions for review of the National Labor Relations Board (the "Board") order directing Trencor to bargain with the United Steelworkers of America (the "Union"). Trencor contends because the Union promised "the biggest party in Texas" if it won the election and dared the company illegally to match union "guarantees" to workers, the election was tainted. The Board cross-petitions for enforcement of its order. Although the Board's treatment of the "guarantees" was not unreasonable, the Board failed to analyze the promise of a post-election party consistently with the Regional Director's facts and this court's precedent. We must therefore deny enforcement of the bargaining order and remand for further proceedings.

I. Background

On August 3, 1995, Trencor's maintenance and production employees voted on whether the Union would serve as their exclusive collective-bargaining representative. Of 99 eligible voters, 70 voted for representation and 26 voted against. 1 Trencor filed objections to the election, but, after an administrative investigation without a hearing, the NLRB Regional Director issued a report recommending that Trencor's objections be overruled and that the Union be certified. The Board adopted the Regional Director's recommendations and certified the Union as the exclusive collective bargaining agent for the employees.

After certification, Trencor refused to bargain with the Union. In November 1995, the Union filed an unfair labor practice charge and the Regional Director subsequently issued an unfair labor practice complaint. Trencor's answer admitted its refusal to bargain, but alleged that Union misconduct tainted the election and that the Union's certification was invalid. In its February 26, 1996 Decision and Order, the Board granted the General Counsel's motion for summary judgment, concluding that Trencor's objections were or should have been litigated in the representation proceeding and that no new evidence or special circumstances warranted reexamination of the representation proceeding. The order affirmatively requires Trencor to bargain with the Union, post appropriate notices, and comply with the Union's requests for information.

On appeal, Trencor concedes that it has refused to bargain, but challenges the Board decision to certify the Union. Trencor's challenge centers on three alleged improprieties committed by the Union on the eve of the election.

II. Standard of Review

The Board's decision will be upheld by this court if it is reasonable and supported by substantial evidence in the record. NLRB v. McCarty Farms, Inc., 24 F.3d 725, 728 (5th Cir.1994). The Board is given a "wide degree of discretion" in resolving election

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disputes. NLRB v. A.J. Tower Co., 329 U.S. 324, 330, 67 S.Ct. 324, 328, 91 L.Ed. 322 (1946); NLRB v. New Orleans Bus Travel, Inc., 883 F.2d 382, 384 (5th Cir.1989). An objecting party must demonstrate that any improprieties "interfered with the employees' exercise of free choice to such an extent that they materially affected the results of the election." NLRB v. Golden Age Beverage Co., 415 F.2d 26, 30 (5th Cir.1969). See also NLRB v. Rolligon Corp., 702 F.2d 589, 592 (5th Cir.1983) ("the need for a ... new election is judged not against a standard of perfection, but against the likelihood that the outcome of the election might have been affected"). Since the Board resolved this issue at summary judgment without conducting a hearing, we must accept all allegations presented by Trencor's evidence and all reasonable inferences in a light most favorable to Trencor. McCarty Farms, 24 F.3d at 729.

III. Alleged Union Improprieties

  1. Promise of the "Biggest Party in Texas"

    Trencor complains that the Union offered conditional inducements to win employee support in the election. The day before the election, Union agent Bill Fears told employees that if the Union won the election, it would host "the biggest party in the history of Texas," and that the Union would buy "all the food and beer." Trencor primarily relies on NLRB v. Lou Taylor, Inc., 564 F.2d 1173 (5th Cir.1977), and Crestwood Manor, 234 NLRB 1097, 1978 WL 7316 (1978) to argue that such conditional inducements render the election invalid.

    In Lou Taylor, this court enforced a Board order in which the announcement of a company's annual Christmas party in an employer's campaign speech the day before the election was found to be illegal. 564 F.2d at 1175. The company president promised that there would be a Christmas party and "that the employees would be paid for the time spent at the party and for the holiday." Id. An administrative law judge and the Board found, and this court affirmed, that the announcement improperly influenced the employees' choice despite the fact that the employer customarily gave its employees a Christmas party. Id. The election was invalidated notwithstanding the overwhelming rejection of the union. Lou Taylor, Inc., 226 NLRB 1024, 1030 n. 10, 1976 WL 7543 (union received only 38 of 223 votes cast).

    In Crestwood Manor, the Board invalidated an election because of a union's promise to hold a one hundred dollar raffle for employees if the union won the election. 234 NLRB at 1097. The Board stated that:

    The Employer argues that since the Petitioner's raffle was conditioned upon Petitioner's prevailing in the election, the Hearing Officer correctly concluded that it was a promise of benefit which requires setting aside the results of the election. We find merit in the Employer's contention.... If we were not to so find, we might well envision future elections in which employers and unions alike might be tempted to promise employees all sorts of inducements--raffles, prizes, vacation trips, or whatever--if their side won the election. Such an intrusion into the election process would be highly undesirable.

    * * * * * *

    Even if it could be said that the raffle was worth only $1.18 [one in eighty-five chance of winning one hundred dollars] to each employee, we could hardly countenance an offer of $1 to each employee for a union victory or loss.

    Id.

    The Board argues on appeal that a promise to hold a party is qualitatively different from a promise to give a monetary benefit. Relying on the Third Circuit's decision in NLRB v. L & J Equipment Co., 745 F.2d 224, 231 (3d Cir.1984), 2 the Board asserts that offering a victory party is not necessarily

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    "inimical to an atmosphere in which free choice can be made." Promising a party which only lasts one night, the Board alleges, would not "substantially influence employees in a decision having a major effect on their working lives." Id. The Board distinguishes Lou Taylor on the ground that the employees were to be paid for attending the Christmas party, while in this case the victory party was not coupled with a monetary benefit. Similarly, the Board distinguishes Crestwood Manor, noting that the raffle represented a direct financial benefit contingent on the union victory, a notion the Board finds more offensive than the promise of a party.

    The Board's reasoning on appeal might be persuasive if it comported with the facts administratively found. But the Regional Director's recommendations, adopted in full by the Board, admitted that the Union's party invitation "may have served as a possible inducement to get employees to vote for the Union." The Regional Director then concluded that "it does not amount to impermissible coercion [in] the absence of a linkage between the party and either a pre-election pledge of Union support or an actual vote for the Union," citing Nu Skin International, Inc., 307 NLRB 223, 1992 WL 87489 (1992) (overruling employer's objection to union's passing out t-shirts before the election only to employees who signed a pro-union petition). On appeal, the Board neither cites Nu Skin nor relies on the Regional Director's

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    rationale. 3

    Furthermore, Trencor contends that the monetary/non-monetary distinction drawn by the Board is not meaningful, since the benefits promised by the Union have some monetary value. Trencor also points to potential problems with this distinction, noting that substantial non-monetary benefits could potentially be more problematic than the $100 raffle in Crestwood Manor. The Board itself warned of the temptation to offer "all sorts of inducements" as a reason for finding the raffle to be illegal. 234 NLRB at 1097.

    Ultimately, we are persuaded that the Board can not adopt the recommendation of the Regional Director, which notes that offering a party conditioned on the Union victory "may have served as a possible inducement to get employees to vote for the Union ..." but rests on flawed legal analysis, and then argue on appeal that offering a party could not reasonably have been seen as an inducement. 4 See Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168-69, 83 S.Ct. 239, 246, 9 L.Ed.2d 207 (1962) ("The courts may not accept appellate counsel's post hoc rationalizations for agency action; [Securities & Exchange Comm'n v.] Chenery [Corp., 332 U.S. 194, 196, 67 S.Ct. 1575, 1577, 91...

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2 practice notes
  • Trencor, Inc., (1998)
    • United States
    • 18 June 1998
    ...decision is not included inBoard volume 320.2The underlying representation election was held on August 3,1995.3Trencor, Inc. v. NLRB, 110 F.3d 268 (5th Cir. 1997).4I rendered the Bench Decision pursuant to Sec. 102.35(a)(10) ofthe Board’s Rules and Regulations.5I concluded company employee ......
  • Raleigh County Commission, (2000)
    • United States
    • 31 July 2000
    ...stated above, the instant victory party—even with food—does not carry a similar appeal. 6 We recognize that in Trencor, Inc. v. NLRB, 110 F.3d 268 (5th Cir. 1997), the Fifth Circuit reversed the Board’s finding that a hearing on objectionable conduct was not warranted on an employer’s alleg......
2 cases
  • Trencor, Inc., (1998)
    • United States
    • 18 June 1998
    ...decision is not included inBoard volume 320.2The underlying representation election was held on August 3,1995.3Trencor, Inc. v. NLRB, 110 F.3d 268 (5th Cir. 1997).4I rendered the Bench Decision pursuant to Sec. 102.35(a)(10) ofthe Board’s Rules and Regulations.5I concluded company employee ......
  • Raleigh County Commission, (2000)
    • United States
    • 31 July 2000
    ...stated above, the instant victory party—even with food—does not carry a similar appeal. 6 We recognize that in Trencor, Inc. v. NLRB, 110 F.3d 268 (5th Cir. 1997), the Fifth Circuit reversed the Board’s finding that a hearing on objectionable conduct was not warranted on an employer’s alleg......

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