Crown Cork & Seal Co. v. N.L.R.B., AFL-CI

• Decision Date: 07 October 1994
• Docket Number: No. 92-1428,I,AFL-CI,92-1428
• Parties: 147 L.R.R.M. (BNA) 2449, 308 U.S.App.D.C. 326, 63 USLW 2254, 129 Lab.Cas. P 11,197 CROWN CORK & SEAL COMPANY, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent, United Steelworkers of America,ntervenor.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 1130

36 F.3d 1130

147 L.R.R.M. (BNA) 2449, 308 U.S.App.D.C.

326, 63 USLW 2254,

129 Lab.Cas. P 11,197

CROWN CORK & SEAL COMPANY, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent United Steelworkers of America, AFL-CIO, Intervenor.

No. 92-1428.

United States Court of Appeals District of Columbia Circuit.

Argued Nov. 4, 1993.

Decided Oct. 7, 1994.

On Petition for Review of an Order of the National Labor Relations Board (NLRB-4-CA-18732).

Alan D. Berkowitz argued the cause for the petitioner. With him on the brief were Jerome A. Hoffman and Paul D. Snitzer. Frank J. Eisenhart entered an appearance.

David A. Fleischer, Atty., N.L.R.B., argued the cause for the respondent. With him on the brief were Jerry M. Hunter, Gen. Counsel, and Aileen A. Armstrong, Deputy Associate Gen. Counsel, N.L.R.B.

Carol Burkett Hawkins, argued the cause for the intervenor. With her on the brief was Rudolph L. Milasich.

Before: MIKVA, ^* Chief Judge; WILLIAMS and HENDERSON, Circuit Judges.

Opinion for the Court filed by Circuit Judge STEPHEN F. WILLIAMS.

STEPHEN F. WILLIAMS, Circuit Judge:

Petitioner Crown Cork & Seal Company manufactures metal food and beverage cans at plants across the country, including one in Vineland, New Jersey. ¹ In January 1990, the United Steelworkers of America started a unionization drive at the Vineland plant, but lost a Board-sponsored election on May 3, 1990 by a 16-13 vote. The Steelworkers filed unfair labor practice charges against Crown, claiming that various activities by Crown in the campaign had violated Sec. 8(a)(1) of the National Labor Relations Act, 29 U.S.C. Sec. 158(a)(1) (1988). The Administrative Law Judge found,Crown Cork & Seal Co. ("ALJ Decision"), Joint Appendix ("J.A.") 502, and the Board agreed without adding analysis, Crown Cork & Seal Co., 308 NLRB 445, 1992 WL 217941 (1992), that the company had made unlawful threats of plant closure, layoffs, and the elimination of a "Retirement Thrift Plan", and had committed four relatively minor illegalities as well. The Board therefore issued a bargaining order retroactively effective to February 22, 1990, the date of Crown's first alleged violation.

Crown contends here that the Board's conclusions are not supported by substantial evidence, as required under the National Labor Relations Act, 29 U.S.C. Sec. 160(f) (1988), and the Administrative Procedure Act, 5 U.S.C. Sec. 706(2)(E) (1988). See Universal Camera Corp. v. NLRB, 340 U.S. 474, 488, 71 S.Ct. 456, 464-65, 95 L.Ed. 456 (1951). We agree with Crown as to the Board's three principal conclusions, those relating to threats of plant closure, layoffs, and elimination of the Retirement Thrift Plan. Thus, we grant the petition and vacate the Board's findings as to those violations. Because the ALJ expressly rested the bargaining order on the combination of those supposedly illegal threats, J.A. 545, and because it would be impossible to sustain the bargaining order on the basis of the minor violations, we also vacate the bargaining order. See Somerset Welding & Steel, Inc. v. NLRB, 987 F.2d 777, 781 (D.C.Cir.1993) (where "violations the ALJ had considered '[c]entral to the Gissel issue' " were removed from consideration, other "coercive threats" by supervisors were not sufficient evidence to uphold bargaining order).

I. Plant Closure and Layoff Threats

The Board found that an April 17, 1990 letter by John Bugnitz, the plant manager, constituted an illegal threat of both plant closure and layoffs, and that various other statements by Bugnitz and the regional manufacturing manager, James Toomey, constituted illegal threats of layoffs. We will discuss briefly the background shared by all these statements, and then turn to the plant closure and layoff findings in that order.

A. Common Background

Until late 1989, Crown's Vineland plant had two three-piece can manufacturing lines, which produced can cylinders and separate top and bottom lids. Crown disassembled one three-piece line in December 1989 to make way for a new two-piece line, which produced cans with only a separate top. Crown planned to remove the remaining three-piece line from Vineland after the two-piece line became operational in March 1990.

As a result of this shift to two-piece technology, Crown no longer needed all 31 employees. Nevertheless, it retained all but its two most junior employees. Crown put many of those displaced to work on short-term maintenance and repair projects, because it hoped to create additional work at Vineland by developing two new projects. First, Progresso Foods, Crown's Vineland neighbor and principal customer, proposed installing a can-handling system in Crown's plant to be operated by Crown employees. Second, Crown contemplated moving an "end press", which makes lids, from its Hurlock, Maryland plant to Vineland. By late 1989, the company had tentatively decided to make the move.

During the three to five months before the unionization effort began, the company emphasized to the workers that the two hoped-for projects were necessary to maintain the current employment level and were cost-sensitive. As the ALJ found, John Bugnitz, the plant manager, held several "meetings with employees stressing the subject of 'job security' and 'cost' ". J.A. 517. Bugnitz testified, without contradiction (and apparently without disbelief by the ALJ), that in the latter part of 1989, before the unionization drive began, he had explained to the employees that the reason for the proposed move of the end press was "that we were the cheapest place to manufacture those things". J.A. 232.

All of the 32 plants Crown operated in early 1990, with the exception of the Vineland plant and one other, were organized by labor unions. The Steelworkers represented 12 of the unionized plants, which were organized into a "single, multi-plant bargaining unit" with a Master Agreement establishing "uniform terms and conditions of employment" for all 12 plants. The Master Agreement had a provision automatically extending its terms to any new plants where the Steelworkers became certified or recognized. Thus, the company, the union, and the workers all knew in advance precisely what contract terms would apply if the Steelworkers became the representative at Vineland. These terms included wages that averaged about $16.50 an hour, as opposed to a $13.50 average under the status quo, as well as increases in other worker benefits. J.A. 132, 134. That unionization would increase costs at Vineland was never in doubt.

B. Plant Closure

In January 1990, the union began an organizational campaign at the Vineland plant. By February 22, the Steelworkers had obtained authorization cards from 18 of the plant's 31 production and maintenance employees. On that day, the union circulated a flyer to the workers advocating unionization and raising--anticipatorily--the issue of job security:

Naturally, the Company will resist organization, just as they always have, because your fair share takes away from their share. They will undoubtedly threaten lay offs and possibly even a plant closing.

A non-union plant does not guarantee it's [sic] employees jobs. Just ask the laid off workers at Milton and Temple.

J.A. 441.

One of Crown's responses came in a letter dated April 17, 1990 (included in its entirety as Appendix A to this opinion) that reiterated the company's theme, developed long before the unionization drive, that there was a close link between low costs and the continued availability of jobs. Bugnitz asserted that because the can-handling and end-press projects were dependent on low costs, unionization would imperil them. "WE WILL NOT BRING WORK INTO THIS PLANT--AND OUR CUSTOMER WILL SEEK OTHER ALTERNATIVES--IF THAT WORK CAN'T BE DONE AT A REASONABLE COST, a cost that allows both of us to make a fair return on our investment." J.A. 457 (emphasis in original). The letter also included a passage seeking to impugn the union's record on job security:

NOW LET'S LOOK AT THE STEELWORKERS' RECORD ON JOB SECURITY.

FACT NO. 1: In 1970 the Steelworkers Union represented Continental Can employees under their master agreement at 45 locations. Today there are only 12 locations. Nearly 75% of the locations have been CLOSED. Plus another 17 locations were opened and then closed between 1970 and now. That's 50 plant closings in total. Those locations that exist today have even been cut way back.

FACT NO. 2: In 1970, there were approximately 17,500 Continental Can employees working under the Steelworkers master agreement. More than 16,000 of those Continental Can employees (former USW members) have lost their jobs.

J.A. 458 (emphasis in original). The letter went on to emphasize that job security lay more in the company's flourishing than in unionization. "NO union can keep you employed and NO union can guarantee you a paycheck every week if we cannot provide our customers with the high quality products at competitive prices they have come to expect from us here at Vineland." J.A. 458.

In reaching his finding that this letter constituted an unlawful threat, the ALJ appears to have proceeded through the following steps: (1) The letter makes various predictions that amount to a claim that unionization was a frequent, and the sole, cause of plant closings. J.A. 530-31. (2) Viewed as predictions of this sort, the letter's assertions are unsupported. The record indicates that causes in addition to labor cost increases had played a role in the industry's succession of plant closures, causes that the Bugnitz letter failed to mention. Because of these omissions, the letter was "factually unbalanced". J.A. 531. (3) The references to plant closings must have been retaliatory, because any decision not to bring the end press to Vineland was "discretionary" and therefore not the sort of circumstance that an employer may point to under NLRB v. Gissel Packing Co., 395 U.S. 575, 89 S.Ct. 1918, 23 L.Ed.2d 547 (1969), as the basis for a prediction of...