Texas Instruments Inc. v. N.L.R.B.

• Citation: 599 F.2d 1067
• Decision Date: 04 June 1979
• Docket Number: No. 78-1268,78-1268
• Parties: 102 L.R.R.M. (BNA) 2292, 86 Lab.Cas. P 11,339 TEXAS INSTRUMENTS INCORPORATED, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.
• Court: United States Courts of Appeals. United States Court of Appeals (1st Circuit)

Page 1067

599 F.2d 1067

102 L.R.R.M. (BNA) 2292, 86 Lab.Cas. P 11,339

TEXAS INSTRUMENTS INCORPORATED, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.

No. 78-1268.

United States Court of Appeals,

First Circuit.

Argued March 15, 1979.

Decided June 4, 1979.

Wayne S. Bishop, Washington, D. C., with whom Thomas P. Gies, and Seyfarth, Shaw, Fairweather & Geraldson, Washington, D. C., were on brief for petitioner.

Jerrold J. Wohlgemuth, Atty., Washington, D. C., with whom John S. Irving General Counsel, John E. Higgins, Jr., Deputy General Counsel, Robert E. Allen, Acting Associate Gen. Counsel, Elliott Moore, Deputy Associate Gen. Counsel, and John G. Elligers, Atty., Washington, D. C., were on brief for respondent.

Before COFFIN, Chief Judge, BOWNES, Circuit Judge, PETTINE ^*, District Judge.

COFFIN, Chief Judge.

The major issue in this petition for review is whether the National Labor Relations Board (Board) properly found that the petitioner, Texas Instruments Incorporated (TI), at its Attleboro, Massachusetts, plant violated Sections 8(a)(3) and (1) of the National Labor Relations Act, 29 U.S.C. § 151, Et seq. (the Act), by discharging six employees who, in their organizational efforts, distributed leaflets containing wage survey material which had been classified under TI's security system. A secondary question is whether the Board properly found a violation of Section 8(a)(1) of the Act in TI's rule prohibiting its employees from discussing its wage schedule with outsiders.

The Factual Background

TI is a major manufacturer of sophisticated electronic products and much of its work is defense related. It therefore has had, since 1960, a well developed internal security system, to deal adequately with defense security demands, to protect itself against those who would seek highly valued technological product and process information, and to safeguard certain managerial information including "competitive or business intelligence". There are two levels of classification: "TI Strictly Private" and "TI Internal Data". The former is the more sensitive and is applied to all "important TI information or material of a proprietary nature, the unauthorized use or disclosure of which could seriously impair the interests of TI". A deliberate dissemination of information so classified to those who are not employees who "need-to-know" the contents in connection with their work invokes the sanction of immediate and summary discharge. This sanction, while invoked only a few times since 1960, has been regularly applied in cases of proven wilful disclosures of classified material.

TI is strongly opposed to unionization of its plants. So far as the record indicates, this policy has not led, apart from the events with which we deal in this case, to any illegal anti-union activity. All four of the unfair labor practice charges previously brought against TI in the past ten years have been unconditionally withdrawn or dismissed. Frequent leafletting has taken place. Of the 5000 employees at the Attleboro plant, approximately ten constitute the core of the Union Organizing Committee. Some of those, well known union proponents, have been given offers of promotion or have been promoted. All received good ratings on performance reviews during the year prior to the events here in issue.

The company, as a matter of policy, seeks to make its schedule of wages and benefits competitive in the area. Its primary means of realizing this objective is to conduct a yearly wage survey among employers in the area of wages and benefits for specific jobs. The data sought include the number of employees in a specific job category, and the minimum, maximum, and average rates of pay. In seeking the cooperation of other employers TI advises them that "all data will be treated with strict confidence". When it sends cooperators the survey results, it lists the companies, identified only by a code letter, in order, the highest paying employer being first. TI informs each cooperator of its own code letter and also TI's. TI repeats that the wage data is "submitted in confidence and we trust will be treated appropriately." TI uses the wage analysis sheets based on the data to help its top managers arrive at its wage increase decisions. TI's analysis sheets differ from the survey results sent to cooperators in that all companies are listed by name. They have always been classified "TI Strictly Private", and, indeed, bear the stamped classification label.

Some time before May 25, 1977, a copy of TI's most recent wage survey analysis sheets was anonymously mailed to the Organizing Committee's post office box. Members of the Committee were never implicated in the mailing. After receipt of the papers, members of the Committee discussed the information; realized that it would be helpful in their attempts to unionize the company, inasmuch as organized plants were shown to be paying higher rates; and cut off the "Strictly Private" label, reduced and reproduced in a leaflet two comparative tables of wages, one comparing rates for a grade 2-3 benchworker at TI and sixteen other named plants and the other comparing rates for a grade 10 toolmaker at TI and 15 other named plants. Narrative material pointed to the moral:

"The key thing for setting the wages in this area is what the union shops are doing. Take G.E., for example, doing the same work we're doing but making well over $1.00 more an hour, because workers there have struggled over the years through their union for a decent wage. If it wasn't for these organized places paying better wages to bring the average up, we'd be down there with Balfours."

On May 25 the leaflets were distributed at 6:30 a. m. TI's management became aware of the use of the information, Augat and Balfours, two companies at or near the bottom of the tables, called TI to express their concern. The leafletting continued at 3:30 p. m. and management representatives contacted four of the distributors, informing them that the leaflet contained "Strictly Private" matter and warning them that continued distribution would subject them to summary termination. They and others met in the evening. One of them testified, "We discussed it and our decision was that if the company did have any rights in the matter, had any claim on the material or anything of that sort; then they would have confiscated the leaflet right on the spot or taken some kind of measures against us. And, since that hadn't happened, we decided to go out again the next day."

On the next morning, May 26, the leafletting continued, notwithstanding renewed warnings. Later in the day the six people who had been distributing the leaflets were interviewed and then suspended. Five days later TI concluded that evidence was lacking to implicate the employees in the original leak of the data, but that the six employees had wilfully disseminated classified materials and that company policy required immediate termination.

The ALJ's Decision

The ALJ's first step was to state: "That the reason why they were discharged was literally because the six engaged in that sidewalk distribution activity, is . . . conceded. ( ¹ That discrimination in employment . . . for such activity is an unfair labor practice . . . is so obvious that no citation of authority is required at this late date. All that has to be decided is whether there is any merit in the defense argument that in this case there were special circumstances that must excuse what is on its face the clearest unfair labor practice imaginable."

The decision then proceeded to describe the defense. It set forth TI's "studied technique" to use the periodic wage surveys in a selective fashion "conveying the thought that (the employees) are doing well by comparison" with others. After detailing the circumstances of the leak of the wage data and the use thereof in the campaign leaflet, the ALJ described the reasons advanced by TI to justify the discharges as "really argument" to the extent that they declared the classification "of value to the Company, helps its position in a competitive market, and serves the purpose of keeping unions out of the plant." ² He continued by saying that to the extent that the company's "generalizations and conclusions, real or fancied, have anything to do with the employees, the only substantive evidence . . . (of misbehavior) is the Company's handbook, which does contain rules of conduct. And there the only one which could, if at all, apply to what these six did, . . . reads: 'The following major infractions may be considered grounds for termination: . . . Disclosure of classified material to unauthorized persons.' "

The third and final step is the conclusion of the ALJ, with no findings of fact other than the description of "The Asserted Defense" summarized above. He finds unpersuasive the argument that knowledge of other companies' wages is to be equated with commercial or defense secrets; labels the argument that such knowledge is a matter of proprietorship "sound and fury signifying nothing"; and feels that it would "demean this decision to discuss at length" why the employees' use of the leaked information for organizational purposes was not likely to injure or destroy TI's business. The ALJ endorsed the General Counsel's theory that "(w)hen the wages of the employing company are so inextricably entwined with the wages of other employers, and the employing company so advises its employees, it should not be allowed to place any greater restriction on the discussion or disclosure of the other employers' wages than it can place on the discussion of its own wages."

Concluding that the "attempt to place this incident within the rules of conduct set out in the employee handbook is . . . unconvincing", the ALJ found that the company discharged the employees "with an object directly to discourage their statutorily protected right to self-organization." ³

Our Analysis

In proceeding with our own...