557 F.2d 1126 (5th Cir. 1977), 76-2444, Johns-Manville Products Corp. v. N.L.R.B.

Docket Nº:76-2444.
Citation:557 F.2d 1126
Party Name:JOHNS-MANVILLE PRODUCTS CORPORATION, Petitioner-Cross Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent-Cross Petitioner.
Case Date:August 19, 1977
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit
 
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557 F.2d 1126 (5th Cir. 1977)

JOHNS-MANVILLE PRODUCTS CORPORATION, Petitioner-Cross Respondent,

v.

NATIONAL LABOR RELATIONS BOARD, Respondent-Cross Petitioner.

No. 76-2444.

United States Court of Appeals, Fifth Circuit

August 19, 1977

Rehearing and Rehearing En Banc Denied Oct. 26, 1977.

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John D. O'Brien, Cleveland, Ohio, Michael J. Rybicki, Chicago, Ill., for petitioner-cross respondent.

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Elliott Moore, Deputy Assoc. Gen. Counsel, John E. Higgins, Jr., Deputy Gen. Counsel, Carl L. Taylor, Assoc. Gen. Counsel, John S. Irving, Gen. Counsel, Paul J. Spielberg, Supervisor, Howard E. Perlstein, Atty., N. L. R. B., Washington, D. C., for respondent-cross petitioner.

Petition for Review and Cross-Application for Enforcement of an Order of The National Labor Relations Board (Louisiana Case).

Before WISDOM, GEE and FAY, Circuit Judges.

FAY, Circuit Judge:

This case is before the Court on a petition for review and to set aside an Order of the National Labor Relations Board and on a cross-application by the Board seeking enforcement of its Order. The Board affirmed the findings and conclusions of the Administrative Law Judge and adopted his Order in its entirety, 1 holding that the petitioner, Johns-Manville Products Corporation, violated Sections 8(a)(1), 8(a)(3), and 8(a)(5) of the National Labor Relations Act (the Act), as amended, 29 U.S.C. § 151 et seq., 2 by unilaterally hiring permanent replacements for employees who had been lawfully locked out. As a remedy, the Board ordered, in addition to cease and desist provisions, 3 that the Company reinstate the one hundred and seven locked out bargaining unit employees with back pay and, upon request, to bargain with the Oil, Chemical and Atomic Workers International Union, AFL-CIO (the Union). After carefully examining the record, this Court 4 finds that the Board erred in its conclusions. Therefore, we set aside the Board's Order and decline to enforce it.

THE FACTS

The petitioner is engaged at its New Orleans plant in the manufacture of "organic felt," which is a crude form of paper used as a base for asphalt roofing products which the Company produces at its plants in Georgia, Louisiana and California. The procedure for making organic felt consists of a series of steps by which the two basic raw materials, waste wood chips and waste paper, are decomposed, blended with water, and then dried out to finally form paper sheets. Breaks in the paper, especially while still a damp "web", can be caused by striking the water mixture (the "slurry") or the finished sheet with one's finger or an object, or by changing the proper revolutions per minute of the rollers in the various dryer sections. Damage can also be caused by improperly adjusting the valves controlling the blending of paper and wood slurry stock. The evidence shows that sabotage in all these forms can be carried out

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surreptitiously, making it difficult if not impossible to observe the guilty individual or individuals. 5 Further, the large size of the physical plant precluded constant surveillance of the operations. 6

After this Company purchased the New Orleans plant in 1964, the Union was certified by the Board as the unit employees' exclusive collective bargaining representative. 7 Since that time, the Company and the Union have entered into four successive two-year contracts, the latest of which was due to expire on October 12, 1973. Negotiations began in September 1973, following the Union's service of its 60-day notice of termination of contract. The parties met several times for the purpose of negotiating a new collective bargaining contract, but the parties could not agree in several areas. 8

Prior to and during the negotiation period, the Company experienced an unusual amount of production disruption which became more widespread and serious as negotiations progressed. An inordinate number of paper breaks occurred on or about August 21 or 22, 1973 which were the result of improper adjustment of dryer section controls. On August 23, Darrell Wells, the Company's Employee Relations Manager for the New Orleans plant, telephoned Ernest Rousselle, the Union's International Representative, and informed him of this problem. Wells said this type of activity could "only hurt negotiations" and that the plant was not going to continue to operate and make scrap. Rousselle replied that he would check with Local Union officials and get back to him. However, Rousselle did not contact Wells on this subject and the next time it was discussed was at a bargaining meeting held about two months later on October 3, 1973.

From September 1 through October 22, 1973, according to the record, the number of paper breaks during production periods was fifteen to twenty per week in contrast to one to three per week during periods when negotiations were not in progress. 9 Moreover, these breaks occurred on a daily basis and on all three shifts, with the excessive number of paper breaks generally coinciding with negotiation sessions.

Paper breaks were not the only problem. On the day before the October 3rd bargaining meeting, for example, the fine mesh stainless steel surface of a cylinder on one of the paper forming machines was "sharply

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cut" along its circumference. James Weil, the Company's plant manager, testified that in thirty-five years experience he had never seen that kind of damage to a cylinder and that usually the type of damage resulting from wear and tear to such cylinders consists of dents or cuts, which are generally across the cylinder, rather than in the direction of its circumference. The repair of this cylinder cost approximately $4,000.

On the same day it was discovered that a 2,300 volt electrical switch had been opened or disconnected causing a complete shutdown of the mill. This switch is located in the defibrator building, separate and apart from the building in which excessive paper breaks were occurring. The uncontradicted testimony is that this incident could not have happened accidentally because the switch is held in a closed position, not only by a mechanical catch, but also by a heavy rubber band. Weil saw the switch in the open position with the broken rubber band on the floor. Despite the absence of the rubber band, the mechanical catch would have been sufficient to hold the switch closed, if it too had not been released.

As a result of the above described production disruption and damage, James Weil approached the Union's president, Mack Jordan, and asked him to see whether anything could be done about individuals tampering with equipment and causing production delays. Jordan was angered by Weil's request, did not respond to him, and took no affirmative action. At the negotiation meeting on the following day, October 3, 1973, Rousselle said he was "disturbed" because on the previous day Weil had accused Mack Jordan and other Union members of deliberately disrupting production. 10 Wells responded by saying that the Company would not tolerate a continuation of disruptions in production and that they interfered with "the climate of the negotiations". Wells then made an "official" request of the Committeemen that they see to it that production disruptions cease immediately. None of them made any reply to this request.

Immediately thereafter, a vibration developed in one of the three defibrators, requiring it to be shut down. Ball bearings were discovered between its rotating grinding discs.

Sometime about October 11, 1973, the Union held a strike vote among the bargaining unit employees and Rousselle thereafter applied to the International for strike authorization which it granted on October 23, 1973. Although a strike vote had been taken and a strike authorized, Rousselle admitted he never presented any Company offer to the rank and file for a vote.

At the October 12th negotiation meeting, the parties had reached a bargaining impasse.

By October 11th and 12th, paper breaks on both forming machines were so frequent that the machines became inoperable because the pits beneath them were filled with scrap paper. At this point the Company decided to cease operations and lay off 70-80 production employees for a few days. During this time a maintenance crew checked and repaired all the machinery, determining that the recent paper breaks and other problems were not the result of machinery or equipment malfunctioning. Weil testified:

I found as a result of the shut down . . . there was nothing found during that period of time that would have contributed to the vast number of breaks that we had on the machines.

The Company recalled production employees on October 22nd in the hope that operations would return to normal. However, sabotage of products and equipment reached a crescendo on that date. The record shows that all three defibrators were jammed with junk metal and had to be shut

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down and that there was a multitude of paper breaks. The Government's rebuttal witness Donald Hall agreed the situation was "unusual." On his 3:00 p. m. to 11:00 p. m. shift there were as many as six breaks an hour on one machine. Paper breaks on the 22nd were so numerous that in the twenty-four hour period on that date, only thirteen and one-half tons of felt were produced, compared to normal daily production of one hundred and ten to one hundred and twenty tons.

Jim Weil, an expert with over thirty years experience in the paper industry, testified that if the scrap metal found in the bins and screw conveyor chamber had worked its way to the grinding surfaces of the discs, they would have caused an explosion which could have severely damaged the machine and endangered human lives.

Due to the continuing sabotage, it was decided between October 22 and...

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