NLRB v. Daylin, Inc., Discount Division

• Decision Date: 29 March 1974
• Docket Number: No. 72-2189.,72-2189.
• Citation: 496 F.2d 484
• Parties: NATIONAL LABOR RELATIONS BOARD, Petitioner, v. DAYLIN, INC., DISCOUNT DIVISION, d/b/a Miller's Discount Dept. Stores, Respondent.
• Court: U.S. Court of Appeals — Sixth Circuit

496 F.2d 484 (1974)

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. DAYLIN, INC., DISCOUNT DIVISION, d/b/a Miller's Discount Dept. Stores, Respondent.

No. 72-2189.

United States Court of Appeals, Sixth Circuit.

Argued October 16, 1973.

Decided March 29, 1974.

Lawrence Levien, Atty., N. L. R. B., Washington, D. C., for petitioner; Peter G. Nash, Gen. Counsel, John S. Irving, Deputy Gen. Counsel, Patrick Hardin, Associate Gen. Counsel, Elliott Moore, Asst. Gen. Counsel, Charles N. Steele, John M. Flynn, Attys., N. L. R. B., Washington, D. C., on brief.

Milton M. Konowe, New York City, for respondent; Katz & Wolchok, New York City, on briefs.

Gerard C. Smetana, Lawrence M. Cohen, Lederer, Fox & Grove, Chicago, Ill., on brief for the American Retail Federation amicus curiae.

Before EDWARDS, McCREE and MILLER, Circuit Judges.

EDWARDS, Circuit Judge.

The National Labor Relations Board seeks enforcement of its order (reported at 198 N.L.R.B. No. 40). The Board found that respondent Daylin, Inc., had violated Sections 8(a)(1) and 8(a)(3) of the National Labor Relations Act, as amended, 61 Stat. 136, 73 Stat. 519, 29 U.S.C. § 151 et seq. (1970), by enforcing an illegal no-solicitation rule, by coercive interrogation of one employee, Fugate, and by discriminatorily discharging Fugate and another employee, Bogan, for union activity protected by Section 7 of the Act. Its order required respondent to cease and desist from the first two practices referred to above, and to reemploy Fugate and Bogan with back pay.

Respondent is a retail store chain which operates a discount department store at Kettering, Ohio, where the events with which this case is concerned took place.

In November of 1970 respondent employed 40 employees. Two of them (Fugate and Bogan) were employed in the receiving department in the rear of the store, separate from the selling floor. At their lunch hour on November 25, 1970, Bogan and Fugate met a union¹ organizer at a restaurant and received 15 to 20 union authorization cards which they divided between themselves. As to what happened thereafter, the Trial Examiner found:

Upon returning to the store and still on their lunch break, they obtained some signatures on cards from other employees. During the afternoon, other employees came to the receiving room where Bogan and Fugate worked and signed cards. There is disputed testimony that the two men approached employees during working time which, for the purposes of decision, I assume to be true; however, I note that the men were caught up with their work and there is no showing that there was any interference with their duties or the duties of other employees. Having learned from a number of sources that Bogan and Fugate had solicited union cards on company premises and on working time, Store Manager Garrett called them in about 6 p. m. and discharged them.

The respondent's version of the discharge and the reasons therefor, as set forth in its brief, is as follows:

Store Manager Garrett had Fugate summoned to his office about 6:00 P. M. Present were Garrett, Fugate, Emmons, and the Regional Security Officer, Tom Weigand. Garrett gave Fugate the "No Solicitation Rules" and asked him to read them.

Fugate read the Company\'s "No Solicitation Rule":

"The Company has a No Solicitation Rule. This means that no employee or other persons are to solicit other employees, or to be solicited, for any purpose. This applies to religious, fraternal, labor, political, charitable, social or any other such organization. All such activities are prohibited on these premises during paid working hours. Any employee violating this rule is subject to disciplinary action including discharge.

"If you have any question regarding this, please contact the Personnel Dept."

Garrett asked if he understood it. Fugate replied that he did. Garrett told Fugate, "I have information that you are soliciting on Company time. It\'s complete grounds for dismissal," and Garrett asked Fugate to check out and leave.

Bogan then was called to Garrett\'s office and was also given the Company\'s "No Solicitation Rule" to read. Garrett told Bogan he had information that he was soliciting on Company time, and it was grounds for dismissal, and requested him to punch out and leave. Bogan denied soliciting other than on his break and lunch period.

Garrett denied that he asked Fugate at this discharge meeting if he had any union cards signed or asked to see the cards. Garrett denied questioning Fugate about union activities at the Miller\'s Airway Store operated by the Company at another location.

The Trial Examiner and the majority of the National Labor Relations Board found that the respondent's no-solicitation rule was overbroad and (in the absence of any special justification therefor) invalid, and that it had been applied in a discriminatory manner.

They also found that both Bogan and Fugate had been discriminatorily discharged and that Fugate had been subjected to coercive interrogation.

The rationale for these holdings is set forth in the Trial Examiner's decision:

It seems clear that the rule here involved, without question, applies to all areas of the Respondent\'s establishment without distinction as between selling or nonselling area. In consequence, employees would violate the rule if they were to solicit in nonselling areas such as the stockroom area, restroom, lunchroom or various storage areas. Moreover, the rule prohibits solicitation activity during "paid working hours" and, thus, would prohibit employees from soliciting in nonselling areas during their paid break time. Finally, it abundantly appears that the rule was discriminatorily applied to Bogan and Fugate. Witnesses for the Respondent, including Store Manager Garrett and Second Assistant Manager Haines, testified that the Respondent permitted charitable bake sales, solicitation for employee Christmas and Halloween parties and solicitation of dues for the employees Club, during working hours. Indeed, the Respondent allowed a notice of dues owed by employees to the Club to be posted. Admittedly, Garrett stated that he had a different reaction to solicitation in behalf of the Union than in behalf of other activities. When he became aware of the activities of Bogan and Fugate, Garrett contacted Store Manager Connors at another store of the Respondent and asked his advice with respect to handling the situation. Connors came over to the store and, according to Garrett\'s undenied testimony, stated in substance that the Respondent was against the Union.

The problems posed by this case are hardly new ones. In 1945 in the Republic Aviation case, the Supreme Court approved the following in the Peyton Packing Co. holding of the NLRB:

"`The Act, of course, does not prevent an employer from making and enforcing reasonable rules covering the conduct of employees on company time. Working time is for work. It is therefore within the province of an employer to promulgate and enforce a rule prohibiting union solicitation during working hours. Such a rule must be presumed to be valid in the absence of evidence that it was adopted for a discriminatory purpose. It is no less true that time outside working hours, whether before or after work, or during luncheon or rest periods, is an employee\'s time to use as he wishes without unreasonable restraint, although the employee is on company property. It is therefore not within the province of an employer to promulgate and enforce a rule prohibiting union solicitation by an employee outside of working hours, although on company property. Such a rule must be presumed to be an unreasonable impediment to self-organization and therefore discriminatory in the absence of evidence that special circumstances make the rule necessary in order to maintain production or discipline.\' 49 N.L.R.B. 828, 843-44." Republic Aviation Corp. v. NLRB, 324 U.S. 793, 803-804 n. 10, 65 S.Ct. 982, 988, 89 L.Ed. 1372 (1945).

Justice Reed concluded:

In the Republic Aviation case, petitioner urges that irrespective of the validity of the rule against solicitation, its application in this instance did not violate section 8(3), note 1, supra, because the rule was not discriminatorily applied against union solicitation but was impartially enforced against all solicitors. It seems clear, however, that if a rule against solicitation is invalid as to union solicitation on the employer\'s premises during the employee\'s own time, a discharge because of violation of that rule discriminates within the meaning of § 8(3) in that it discourages membership in a labor organization. Id. at 805, 65 S.Ct. at 989.

There seems to us to be no doubt that respondent's no-solicitation rule was overbroad and invalid for NLRA purposes for exactly the same reasons that the Supreme Court dealt with in Republic Aviation, supra. Respondent's rule would, of course, properly and lawfully forbid such solicitation on the selling floor, see Montgomery Ward & Co. v. NLRB, 339 F.2d 889 (6th Cir. 1965), or in situations where such activity interfered with job performance. See Peyton Packing Co., 49 N.L.R.B. 828. But it would also purport to forbid employees from "soliciting" union membership on break time, in rest rooms and in waiting time.²

"Soliciting" union membership inevitably involves speech. Such speech is not only a right protected by the NLRA, it is also a right protected by the First Amendment, as the Supreme Court held in its first encounter with the soliciting problem. See Thomas v. Collins, 323 U.S. 516, 65 S.Ct. 315, 89 L. Ed. 430, rehearing denied, 323 U.S. 819, 65 S.Ct. 557, 89 L.Ed. 630 (1945). Anything favorable said about a union or the labor movement can be construed as "solicitation." Id. at 534-535, 65 S.Ct. 315.

On the other hand, no employer has any constitutional or legal obligation to pay for his employees' endeavors on behalf of a union unless by the terms of a labor/management agreement. This is particularly true when soliciting...