Cartwright Hardware Co., Inc. v. N.L.R.B.

• Citation: 600 F.2d 268
• Decision Date: 18 June 1979
• Docket Number: No. 77-1425,77-1425
• Parties: 101 L.R.R.M. (BNA) 2652, 86 Lab.Cas. P 11,363 CARTWRIGHT HARDWARE COMPANY, INC., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.
• Court: United States Courts of Appeals. United States Court of Appeals (10th Circuit)

Page 268

600 F.2d 268

101 L.R.R.M. (BNA) 2652, 86 Lab.Cas. P 11,363

CARTWRIGHT HARDWARE COMPANY, INC., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.

No. 77-1425.

United States Court of Appeals, Tenth Circuit.

Argued Sept. 28, 1978.

Decided June 18, 1979.

Peter J. Adang of Modrall, Sperling, Roehl, Harris & Sisk, Albuquerque, N. M., for petitioner.

Edward S. Dorsey, Washington, D. C. (with Elinor Hadley Stillman, Linda Eugenie Auerbach, John S. Irving, John E. Higgins, Jr., Carl L. Taylor and Elliott Moore, Washington, D. C., on the brief), for respondent.

Before McWILLIAMS, McKAY and LOGAN, Circuit Judges.

McKAY, Circuit Judge.

We are asked to set aside an order of the National Labor Relations Board (NLRB) which seeks to remedy certain violations of the National Labor Relations Act (the Act) committed by Cartwright Hardware, Inc. (Cartwright). ¹ The NLRB has cross-applied for enforcement of the order. We have determined that the order should be set aside in part, but otherwise should be granted enforcement.

For thirty years Cartwright had been a nonmember signatory to labor agreements negotiated between the Mechanical Contractors Association of New Mexico and Local 412 of the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada, AFL-CIO (the Union). By letter dated January 28, 1976, William Loomis, the president of Cartwright, notified the Union "that as of April 1, 1976, we will no longer operate a union shop and we wish to terminate the labor agreement between us and Local Union # 412 as of March 31, 1976." Record, vol. 2, at 460. Loomis drafted the letter in compliance with the requirement of the existing agreement that either party wishing to terminate give sixty days notice of cancellation. The Union did not respond to the letter or to subsequent attempts by Cartwright employees to have Union leaders discuss the impending contract termination.

In mid-March, without having had a response from the Union, Loomis prepared a proposed schedule of wages and fringe benefits for the period following the anticipated expiration of the collective bargaining agreement. The employees were apprised of the proposed schedule by direct contact with management personnel. Cartwright managers also initiated inquiries among the employees as to which of them would be willing to work after contract expiration. In addition, Cartwright began to interview prospective replacements for employees unwilling to continue working.

On March 30, Union leaders visited Loomis to seek his signature on a new contract which had been negotiated with the Mechanical Contractors Association. Loomis informed the Union that he was not ready to sign the contract and referred to his disappointment with the Union's performance in providing qualified plumbers for Cartwright employment under the contract's hiring hall policy. The following day Union representatives suggested a thirty day "extension" of the contract to provide time for the negotiation of differences. Loomis indicated he would consider the proposal, but informed his employees of its rejection on April 1. The Union steward then asked for paychecks for all affected employees.

Unfair labor practice charges were swiftly filed against Cartwright. In the decision accompanying the order under review, the NLRB determined that Cartwright had committed unfair labor practices by refusing to bargain with the Union, by withdrawing recognition from it, by constructively discharging three members of the Union, by bargaining directly with its employees, and by unilaterally changing terms and conditions of employment. In reaching these determinations, the NLRB rejected the conclusions of its administrative law judge on all but the final unfair labor practice charge. Cartwright contends that each of the NLRB's findings lacks substantial support in the record. ²

The fact findings of the NLRB are conclusive if they are "supported by substantial evidence on the record considered as a whole." 29 U.S.C. § 160(f) (1976). In discussing this review standard, the Supreme Court has instructed: "The substantiality of evidence must take into account whatever in the record fairly detracts from its weight." Universal Camera Corp. v. N. L. R. B., 340 U.S. 474, 488, 71 S.Ct. 456, 464, 95 L.Ed. 456 (1951). Evidence may properly be considered less substantial when the NLRB's administrative law judge, "who has observed the witnesses and lived with the case," has drawn conclusions different from those reached by the NLRB. Id. at 496, 71 S.Ct. at 469. It is with these principles in mind that we have reviewed the record in this case.

We have concluded that there is substantial evidence in the record as a whole to sustain the NLRB's findings of fact regarding Cartwright's refusal to bargain with the Union, ³ its direct bargaining with employees, its unilateral institution of changed terms and conditions of employment, and its withdrawal of recognition from the Union. ⁴ In addition, we have concluded that the relevant legal doctrines support the NLRB's determinations respecting these issues.

We have had more difficulty with the NLRB's conclusion that Cartwright constructively discharged three employees in violation of the Act. After careful scrutiny of the record and reference to appropriate authorities, we have decided that this determination was erroneous.

Section 8(a)(3) of the National Labor Relations Act makes it an unfair labor practice for an employer "by discrimination in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization." 29 U.S.C. § 158(a)(3) (1976). A constructive discharge is found when an employer makes working conditions so intolerable as to force an employee to resign. Such a forced resignation is a violation of section 8(a)(3) when it has been induced to discourage union activity or membership. A constructive discharge in violation of section 8(a) (3) thus comprehends at least two distinct elements: (1) An employer's motivation to discourage union activity or membership; and (2) an employee's resignation prompted by employer-created intolerable conditions. See, e. g., J. P. Stevens & Co. v. N. L. R. B., 461 F.2d 490, 494 (4th Cir. 1972); N. L. R. B. v. Holly Bra of California, Inc., 405 F.2d 870, 872 (9th Cir. 1969); N. L. R. B. v. Brennan's, Inc., 368 F.2d 1004 (5th Cir.) (per curiam), Modifying 366 F.2d 560 (5th Cir. 1966). A constructive discharge in violation of the Act can be found, for example, when an employer informs his employees that they must choose between union activity and continued employment, and employees faced with this "choice" decide to terminate their employment. E. g., American Enterprises, Inc., 191 N.L.R.B. 866, 868-69 (1971). A constructive discharge may also arise when an employer seeks to establish an environment in which employees are required to work without the benefit of rights guaranteed them under the Act. If employees resign rather than work in such an environment, they may properly be considered constructively discharged. See, e. g., Superior Sprinkler, Inc., 227 N.L.R.B. 204 (1976); Marquis Elevator Co., 217 N.L.R.B. 461 (1975).

It appears that the NLRB has stated its theory of unlawful constructive discharge to be within the parameters of the cases just referred to:

(B)y requiring its employees to accept unilaterally imposed changes in wages and other working conditions and by repudiating its bargaining obligations in violation of Section 8(a)(5) and (1), Respondent created a situation which made it impossible for its plumbers to continue in the Company's employ and retain their union membership. We therefore find . . . that Respondent constructively discharged employees Schwanke, Lovato, and Saiz in violation of Section 8(a)(3).

Record, vol. 3, at 543, 546 (footnotes omitted). The NLRB's theory is essentially sound. The problem is that it lacks substantial support in the record. We do not believe the record as a whole contains substantial evidence that the three employees resigned because Cartwright had created "impossible" conditions. Neither does it demonstrate that Cartwright was motivated by antiunion animus to establish conditions designed to force his union employees to abandon the Union or their jobs. Given this state of the record, it cannot be concluded that the employees were constructively discharged in violation of section 8(a)(3) of the Act.

We first consider what the record reveals regarding the reasons why the union employees quit. It should be noted at the outset that the evidence does not support a finding that Cartwright managers told the employees that only nonunion workers could remain on the payroll after contract expiration. Neither does the evidence indicate that the employees quit because Cartwright sought unilaterally to impose a changed wage scale, or because Cartwright had refused to negotiate. Rather, it appears that most ⁵ of the union members quit because they believed they could not work in an open shop without sacrificing their union memberships. But this circumstance did not arise because of some action by Cartwright. It arose because of the employees' perception, buttressed by discussions with union leaders, that a "secret" provision of the Union's bylaws mandated a choice between continued employment and union membership. ⁶ Record, vol. 1, at 213-15, 277-78, 290, 300, 306, 319, 320-21.

Our basic concern can be simply expressed. It is not disputed that an employer may lawfully permit a collective bargaining agreement to terminate upon normal expiration. Neither is it disputed that a union shop provision does not survive contract termination. See, e. g., N. L. R. B. v. Cone Mills Corp., 373 F.2d 595, 598 (4th Cir. 1967). Suppose, however, that certain union employees are subject to a union bylaw provision making it impermissible for them to work in...