620 F.2d 367 (3rd Cir. 1980), 79-1690, N.L.R.B. v. Pincus Bros., Inc.-Maxwell

Docket Nº:79-1690.
Citation:620 F.2d 367
Case Date:April 17, 1980
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit

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620 F.2d 367 (3rd Cir. 1980)




No. 79-1690.

United States Court of Appeals, Third Circuit

April 17, 1980

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[Copyrighted Material Omitted]

Argued Jan. 8, 1980.

As amended June 12, 1980.

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Susan L. Williams (Argued), John S. Irving, Gen. Counsel, John E. Higgins, Jr., Deputy Gen. Counsel, Robert E. Allen, Acting Associate Gen., Elliott Moore, Deputy Associate Gen. Counsel, N. L. R. B., Washington, D. C., for N. L. R. B.

Robert E. Wachs (Argued), Phillip E. Garber, Wolf, Block, Schorr & Solis-Cohen, Philadelphia, Pa., for Pincus Bros., Inc.-Maxwell.

Before GIBBONS, ROSENN, and GARTH, Circuit Judges.


ROSENN, Circuit Judge.

Statutory policy of the Labor Management Relations Act (the Act), 29 U.S.C. § 173(d) (1976), encourages the use of the grievance and arbitral machinery for the settlement of disputes agreed upon by the parties to a collective bargaining agreement. The dominant issue raised by this

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petition of the National Labor Relations Board (the Board) for enforcement of its order is whether the Board committed error in declining to defer to an arbitration award which determined that the employer had discharged an employee for just cause. We conclude that the Board abused its discretion in refusing to defer to the arbitration award and therefore deny enforcement of the Board's order.


Pincus Brothers, Inc.-Maxwell (Pincus Brothers or the Company) is a Philadelphia manufacturer and wholesale distributor of men's clothing. Its employees are represented by the Philadelphia Joint Board, Amalgamated Clothing Workers of America (the Union). Jane Richardson was employed in the sleeve department of the plant from December 5, 1975, until her discharge on February 18, 1977.

On several occasions during her employment Richardson left her work station to converse with other employees and was directed by her supervisor not to waste time. In October 1976, when there was insufficient work to keep all the sleeve department employees working a 40-hour week, several employees and the union business agent asked Company President, Irwin N. Pincus, to lay off Richardson, the least senior member of the department. At the time, Pincus refused.

On February 15, 1977, the Company and the Union held their semi-annual plant meeting with employees and union representatives during which employee complaints and suggestions were discussed. Pincus spoke about general company developments, including certain style changes. Several sleeve setters questioned Pincus as to whether the piece rate would be changed as a result of the style changes. 1 Pincus responded that more flexibility would be required.

Following the meeting Richardson prepared a one-page leaflet entitled "WE WON'T SACRIFICE FOR PINCUS' PROFITS." 2 The leaflet called the plant meeting

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a "circus" and characterized Pincus' call for flexibility as effectuating "pay cuts" to "our already stinking pay checks." The leaflet further stated that "(t)he way we have to work ain't no different from any other stinking garment shop in this city" and referred to the "lousy style of clothes" Pincus was making.

On February 18, 1977, Richardson brought copies of the leaflet to the plant and prior to the 8 A.M. starting time placed some in the women's restroom. She also gave a stack of the leaflets to another employee, Joe Ferraro, and asked him to place them in the men's restroom. After reading one leaflet, Ferraro tore up the stack he had been given. Richardson also handed out leaflets elsewhere in the plant until approximately 8:05 A.M. About 8:15 A.M. Pincus was informed of the leafletting by Plant Manager, Peter Matazzo. According to Matazzo, production was disrupted on the work floor because of employees' reading the leaflet. At approximately 1:40 P.M. that day, Pincus instructed Matazzo to discharge Richardson. Matazzo called Richardson and the union shop chairman into his office. After an initial denial, Richardson admitted distributing the leaflet. Matazzo discharged her without further questions or discussion.

Soon after the discharge the Union filed a grievance on behalf of Richardson which, under the collective bargaining agreement, terminated in arbitration. On April 12, 1977, the arbitrator 3 rendered his decision, concluding that the discharge was for cause because Richardson had (1) abused working time, and (2) written a handbill which she distributed during both working and nonworking time which "intentionally misrepresented or distorted facts related to certain employment practices and to certain business policies and product status of the Company in a denigrating, disparaging fashion so as to constitute detrimental unprotected disloyalty."

While the grievance was pending, Richardson filed a charge on February 24, 1977, with the Board alleging that Pincus Brothers violated section 8(a)(1) of the Act 4 by discharging her because she engaged in concerted activities. The General Counsel issued a complaint and agreed with the Company to waive a decision by an Administrative Law Judge (ALJ) and submit to the Board the question of whether the Board should defer to the arbitrator's award. The Board delegated its authority to a three-member panel pursuant to section 3(b) of the Act. 5 The panel relied on the facts as found by the arbitrator and concluded it would not defer because Richardson engaged in protected activity and her discharge violated section 8(a)(1), 237 N.L.R.B. No. 159. The Board thereupon remanded the case to an ALJ for a hearing. He found that Pincus committed an unfair labor practice in discharging Richardson and ordered the Company to reinstate her. In a Supplemental Decision and Order of April 9, 1979, the Board adopted the ALJ's findings and conclusions. The Board then commenced this action for enforcement of its order. 6

The Board recognized that the applicable standard for its deference to arbitral awards was the standard enunciated in Spielberg Manufacturing Co., 112 N.L.R.B. 1080 (1955). In Spielberg, the Board stated that it would defer to the arbitrator's award where (1) the proceedings have been fair and regular; (2) the parties agreed to be bound; and (3) the decision is not "clearly

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repugnant" to the purposes and policies of the Act. In this case, the parties agree that the proceedings were fair and regular and that the parties agreed to be bound by arbitration. 7 The Board concluded that the findings of the arbitrator were "clearly repugnant" to the Act and declined to defer. Thus, the determinative issue in this enforcement petition is whether the Board erred in concluding that the arbitration award was "clearly repugnant" to the Act.


The first issue we must resolve is this court's standard of review of the Board's refusal to defer to the arbitration award. The company urges that we review the Board's refusal to defer as a matter of law while the Board claims the substantial evidence rule is applicable. It is our duty to insure that the Board adheres to its established criteria unless it clearly decides to modify or alter those standards. We, therefore, adhere to the prevailing view that the decision of the Board in refusing to defer will be overturned only if the Board has abused its discretion. 8 Hawaiian Hauling Service, Ltd. v. NLRB, 545 F.2d 674, 676 (9th Cir.), cert. denied, 431 U.S. 965, 97 S.Ct. 2921, 53 L.Ed.2d 1061 (1976); NLRB v. Horn & Hardart Co., 439 F.2d 674, 679 (2d Cir. 1971). 9

We turn now to the merits of the Board's order. The Spielberg doctrine evolved as a means of accommodating the national policy in favor of the private resolution of labor disputes through consensual arbitration. 10 That policy finds expression in Section 203(d) of the Act, 29 U.S.C. § 173(d) (1976), which declares: "Final adjustment by a method agreed upon by the parties is hereby declared to be the desirable method for settlement of grievance disputes arising over the application or interpretation of an existing collective-bargaining agreement." As more fully explained in International Harvester Co., 138 N.L.R.B. 923 (1962), the source of the Board's deferral policy is rooted in both congressional and Supreme Court pronouncements.

The Act, as has repeatedly been stated, is primarily designed to promote industrial peace and stability by encouraging the practice and procedure of collective bargaining. Experience has demonstrated that collective-bargaining agreements that provide for final and binding arbitration of grievance and disputes arising

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thereunder, "as a substitute for industrial strife," contribute significantly to the attainment of this statutory objective. . . .

Recognizing arbitration as an instrument of national labor policy for composing contractual differences, which it found imbedded in the (Act) and other Federal legislation and sources, the Supreme Court of the United States has given this policy meaningful substance. . . . So important a role did the Court regard arbitration as playing in the national labor scheme as "a stabilizing influence" that the Court in later cases cautioned the lower courts in Section 301 suits to refrain from passing on the merits of the grievances under the guise of determining the question of arbitrability, but to construe contractual arbitration provisions expansively if "congressional policy in favor of settlement of disputes by the parties through the machinery of arbitration" is to be realized.

If complete effectuation of the Federal policy is to be achieved, we firmly believe that the Board, which is entrusted with the administration of one of the many facets of national labor policy, should give hospitable acceptance...

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