701 F.2d 703 (7th Cir. 1983), 81-1635, N.L.R.B. v. Katz

Docket Nº:81-1635.
Citation:701 F.2d 703
Party Name:NATIONAL LABOR RELATIONS BOARD, Petitioner, v. Paul KATZ and Sylvia Katz, d/b/a Triplex Manufacturing Company, Respondent.
Case Date:March 07, 1983
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit

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701 F.2d 703 (7th Cir. 1983)



Paul KATZ and Sylvia Katz, d/b/a Triplex Manufacturing

Company, Respondent.

No. 81-1635.

United States Court of Appeals, Seventh Circuit

March 7, 1983

Argued Sept. 30, 1982.

Michael Messitte, Elliott Moore, N.L.R.B., Washington, D.C., for petitioner.

Arthur B. Muchin, Dorfman, Cohen, Laner & Muchin, Ltd., Chicago, Ill., for respondent.

Before PELL and WOOD, Circuit Judges, and HILL, Senior District Judge. [*]

PELL, Circuit Judge.

The National Labor Relations Board (NLRB or Board) petitions for enforcement of its order requiring Paul Katz and Sylvia

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Katz d/b/a Triplex Manufacturing Company (Company) to bargain with District 8, International Association of Machinists and Aerospace Workers, AFL-CIO (Union) upon request.

The primary issue raised by the Company is whether its allegations of preelection misconduct raised a prima facie case for overturning the election. If so, the Company urges, the Acting Regional Director erred in failing to conduct further investigation into the Company's charges that the Union interjected religious, ethnic, and racial slurs into the preelection atmosphere and threatened employees with job loss and violence unless they voted for the Union. 1


The Union filed a representation petition on August 22, 1979. A representation election was held on October 17th of that year. The unit was comprised of shipping, receiving, production, and maintenance employees of the Company. Sixteen employees voted for the Union; fifteen voted against. On October 23, 1979, the Company filed objections to the Union's preelection conduct. 2 In response to a request from the Acting Regional Director, the Company submitted a list of the names of all witnesses together with a brief summary of the testimony of each. Seven signed affidavits were submitted. The Company informed the Regional Office that the witnesses would be made available upon request by the Regional Director.

No one from the Regional Office made contact with the employees who had submitted affidavits. Two months after the objections were filed, the Acting Regional Director issued his "Report on Objections." Although the Acting Regional Director assumed the allegations in the affidavits to be true, his Report overruled the Company's objections and recommended certification of the Union as the exclusive bargaining representative of the unit employees.

On January 21, 1980, the Company filed exceptions to the Report with the NLRB. On April 7, 1980, the Board certified the Union and adopted the Acting Regional Director's finding and recommendations. Three days later, the Company notified the Union that it would seek court review of the Board's decision. The Company stated that it refused to negotiate with the Union.

Ten days later, the Union filed a complaint alleging that the Company's refusal to bargain violated sections 8(a)(5) and (1) of the National Labor Relations Act, 29 U.S.C. Secs. 158(a)(5) and (1) (NLRA or Act). On June 4, 1980, the General Counsel filed a motion for summary judgment before the Board. The Board issued a notice to show cause why that motion should not be granted. The Company cited the preelection conduct of the Union and the failure of the Acting Regional Director to investigate or hold a hearing regarding the Company's objections. On September 8, 1980, the Board issued its decision and order, finding that the issues raised by the Company could have been litigated in the prior representation proceeding. The Board found that the Company had not offered any new evidence or presented any other special reason that would require the Board to reexamine the decision made in the representation proceeding. The Board therefore granted the General Counsel's motion for summary judgment. It ordered the Company to cease and desist from interfering, restraining, or coercing employees in the exercise of their rights guaranteed by section 7 of the Act, 29 U.S.C. Sec. 157. The Board also ordered the Company to bargain with the Union upon request, to embody any understanding reached in a signed agreement, and to post the appropriate notice.

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In Mosey Manufacturing Co. v. NLRB, 701 F.2d 610 No. 81-1668 (7th Cir. Feb. 18, 1983) (en banc), this court held that the proper standard of review for issues involving the Board's application of its own rules to factual situations is substantial evidence. Id. at 614-615.

Three Board "rules" are relevant to the instant controversy. First, we consider the criteria for whether the Acting Regional Director was required to investigate further the Company's allegations. Two regulations are pertinent: "If Objections are filed to the conduct of the election or conduct affecting the result of the election, ... the Regional Director shall ... investigate such objections," 29 C.F.R. Sec. 102.69(c) (1979), and "if it appears to the Regional Director that substantial and material factual issues exist, which, in the exercise of his reasonable discretion, he determines may more appropriately be resolved after a hearing, he shall issue and cause to be served upon the parties a notice of hearing on said issues before a hearing officer," id. Sec. 102.69(d). The Board's Case Handling Manual provides guidance on when further investigation is required: "It is incumbent upon the party filing objections ... to furnish evidence to provide a prima facie case in support thereof before the Region is required to investigate the objection." Case Handling Manual, Sec. 11392.5.

Under Mosey, the Board's determination that neither a hearing nor other further investigation was...

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