N.L.R.B. v. Hasbro Industries, Inc.

• Decision Date: 03 February 1982
• Docket Number: No. 81-1227,I,AFL-CI,81-1227
• Citation: 672 F.2d 978
• Parties: 109 L.R.R.M. (BNA) 2911, 93 Lab.Cas. P 13,310 NATIONAL LABOR RELATIONS BOARD, Petitioner, v. HASBRO INDUSTRIES, INC., Respondent, Local 26L, Graphic Arts International Unionntervenor.
• Court: U.S. Court of Appeals — First Circuit

Page 978

672 F.2d 978

109 L.R.R.M. (BNA) 2911, 93 Lab.Cas. P 13,310

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. HASBRO INDUSTRIES, INC., Respondent Local 26L, Graphic Arts International Union AFL-CIO, Intervenor.

No. 81-1227.

United States Court of Appeals First Circuit.

Argued Sept. 17, 1981.

Decided Feb. 3, 1982.

Christine Weiner, Washington, D. C., with whom William A. Lubbers, Gen. Counsel, John E. Higgins, Jr., Deputy Gen. Counsel, Robert E. Allen, Acting Associate Gen. Counsel, Elliott Moore, Deputy Associate Gen. Counsel, Peter M. Bernstein and Lawrence J. Song, Washington, D. C., were on brief, for petitioner.

Roger S. Kaplan, New York City, with whom Neil M. Frank, Jo-Anne P. Morley, and Jackson, Lewis, Schnitzler & Krupman, New York City, were on brief, for respondent.

Eugene Cotton, Chicago, Ill., with whom Cotton, Watt, Jones, King & Bowlus, Chicago, Ill., was on brief, for intervenor.

Before COFFIN, Chief Judge, CAMPBELL, Circuit Judge, and MURRAY, ^* Senior District Judge.

LEVIN H. CAMPBELL, Circuit Judge.

The National Labor Relations Board petitions for enforcement of its order finding Hasbro Industries, Inc. ¹ guilty of unfair labor practices and ordering it to bargain with Local 26L, Graphic Arts International Union, AFL-CIO (the Union).

Hasbro manufactures and distributes toys, printed materials and related products. It has four facilities in New England, but the dispute before us relates only to a group of printing employees at its main plant located on Newport Avenue, Pawtucket, Rhode Island. One of the principal operational divisions there was the packaging and box-making department, managed by Mr. Sidney Feldman and manned by approximately 45 employees. Within that department was a printing section, ² consisting at first of 18, and later 15, employees. It is these printing employees with whom we are here concerned.

On January 24, 1977, the Union wrote Hasbro requesting recognition as the bargaining agent of its printing and lithographic employees based on authorization cards signed by 11 of the 18 employees then in the printing section. On the same day, the Union initiated a representation proceeding before the Board. A few days later, Hasbro advised the Union that its representation claim would have to await the outcome of that Board proceeding.

After a hearing on the Union's petition, the Regional Director determined that the printing unit was appropriate and directed an election. As noted, this unit had 18 employees initially, but by the time of the On December 22, 1977, the Union filed objections to the election. These were sustained by the Regional Director on February 6, 1978, who ordered a second election. On February 16, 1978, the Union filed unfair labor practice charges against Hasbro, and the second election was deferred pending determination of these.

election it had only 15 by reason of a reduction in force. Originally scheduled for June 1977, the election was postponed at Hasbro's request pending Board review of the Regional Director's decision. That decision was affirmed on or about November 21, 1977, and the election was finally held on December 16, 1977, resulting in seven votes for and eight votes against the Union. (Three additional votes cast by employees who had been laid off as the result of the reduction in force were challenged by Hasbro and invalidated by the Board.)

Hearings before an administrative law judge (ALJ) were held in 1978 and 1979 on these and later-filed charges, and the ALJ rendered an opinion in August 1980. While rejecting several of the General Counsel's charges, the ALJ found that Hasbro had committed a series of unfair labor practices, both before and after the election, in violation of section 8(a)(1) of the Act. 29 U.S.C. § 158(a)(1). ³ He further found that Hasbro's refusal to bargain with the Union violated section 8(a)(5), 29 U.S.C. § 158(a)(5), and that its conduct was such as to make the holding of a fair election impossible. He accordingly recommended, in addition to cease and desist orders and the posting of notice, that a Gissel order be entered, ⁴ directing Hasbro to bargain with the Union, as representative of its printing employees. The Board substantially accepted the ALJ's findings and recommendations, and this enforcement proceeding followed.

Hasbro now challenges the Board's findings and rulings, asserting that they are unsupported in fact and legally incorrect. In reviewing the Board's action, we shall first consider its findings of section 8(a)(1) violations, and, at the end, shall consider whether the bargaining order was warranted.

THE UNFAIR LABOR PRACTICES

1. Wage Increases to Three Employees before the Election

Wage increases were granted to three unit employees-Moreira, Tinley and Goyette-on November 28, 1977. The election was thereafter held on December 16, 1977, that date having been announced on November 21, 1977. The ALJ found that these increases violated section 8(a)(1) because "expressly timed to influence employees in the election." Hasbro responds by pointing out that the increases had been scheduled towards the beginning of 1977 and were therefore merely the consummation of earlier plans made entirely without reference to the election.

The evidence is undisputed that on January 10, 1977, Mr. Feldman, the department manager, scheduled, and listed on the payroll, projected wage increases for Tinley and Moreira. He did the same for Goyette sometime in April 1977, when Goyette was reclassified to a higher grade. Feldman's notations indicated that during 1977 Moreira would go from $4.60 to $5.40 in three steps: a 30-cent increase on February 1, 1977; a 25-cent increase on August 1, 1977; and a 25-cent increase on December 1, 1977. Tinley was listed as going from $3.45 to $3.90 in two steps: a 20-cent increase on July 1, 1977, and a 25-cent increase on December 1, 1977. Goyette was listed as being entitled to three increases: 20 cents on July 20, 1977; 20 cents on October 20, 1977; and 25 cents on November 20, 1977.

The record shows that in the case of Moreira and Tinley the planned raises were all implemented within a short time of the scheduled dates. ⁵ Goyette's schedule was similarly implemented, except the increase slated for October 20, 1977, was inexplicably omitted. The raises here challenged-all put in effect on November 28-were those scheduled for Moreira and Tinley on December 1, and for Goyette on November 20.

We think there is insufficient evidence to support the ALJ's finding that the increases were "timed" to influence the election. The timing had been determined long before the election was scheduled, and the Company had thereafter followed its schedule with a considerable degree of fidelity.

The ALJ, indeed, did not question the Company's evidence showing that the increases for Moreira and Tinley had been projected before the Union had requested recognition, and, for Goyette, reflected an increase in grade and was planned well before anyone knew there would be an election in mid-December of 1977. Nor is there any doubt that the dates originally scheduled for implementing the raises preceded the election by some several weeks. Under these circumstances, we see no basis for holding that the raises on November 28 were improper under the Act.

Conferral of employee benefits while a representation election is pending for the purpose of inducing employees to vote against the Union interferes with the employees' protected right to organize, NLRB v. Exchange Parts Co., 375 U.S. 405, 84 S.Ct. 457, 11 L.Ed.2d 435 (1964). However, the presumption of illegality of wage increases and other benefits granted during the pendency of a union election is negated if the employer establishes that the conferral and announcement of such benefits are consistent with established company practice or were planned and settled upon prior to the initiation of the Union's organization campaign. Louisburg Sportswear Co. v. NLRB, 462 F.2d 380, 384 (4th Cir. 1972); NLRB v. Otis Hospital, 545 F.2d 252, 255 (1st Cir. 1976) (where the prospective benefits were already incorporated in the existing terms and conditions of employment, an employer could grant the benefits without fear of violating section 8(a)(1)).

Here there can be no serious contention that the wage increases were not part of an established company procedure. In fact, the ALJ found that "at some point" the three individuals would have received the raises. The Board's unfair practice finding seems to have entirely rested on its surmise that the timing of the wage increases was advanced to before the election so as to influence its result. This would have been improper. NLRB v. Styletek, 520 F.2d 275 (1st Cir. 1975). But in a case such as Styletek, "the company was unable to pinpoint a conclusive reason that justified this particular timetable." 520 F.2d at 281. Hasbro, to the contrary, has demonstrated "a conclusive reason," in the form of a predetermined schedule, which called for making the increases when they were in fact made. ⁶ Although the Board argues otherwise, the evidence does not permit a reasonable inference that Hasbro had, in the past, ordinarily ignored that schedule. The Board's own rule, as noted in Styletek, is that when a representative election is pending, the employer should act as if the Union were not on the scene. 520 F.2d at 281 n.5. Here, Hasbro demonstrably did just that. Indeed, had it withheld the increases until after the election, it would have deviated from this rule. Accordingly, we find that the Board has failed to sustain its burden of showing that the timing of the wage increases was intended to interfere with the employees'

exercise of their right to choose the Union as their bargaining representative.

2. Coercive Letters

Hasbro sent many letters to its printing employees in the brief period before the election urging them to weigh carefully their votes and suggesting strongly that a vote for the...