N.L.R.B. v. Katz

Decision Date07 March 1983
Docket NumberNo. 81-1635,81-1635
Citation701 F.2d 703
Parties112 L.R.R.M. (BNA) 3024, 31 Fair Empl.Prac.Cas. 319, 31 Empl. Prac. Dec. P 33,495, 96 Lab.Cas. P 14,108 NATIONAL LABOR RELATIONS BOARD, Petitioner, v. Paul KATZ and Sylvia Katz, d/b/a Triplex Manufacturing Company, Respondent.
CourtU.S. Court of Appeals — Seventh Circuit

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 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

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.

I. BACKGROUND

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.

II. MERITS

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 required can stand only if there is substantial evidence to support the conclusion that the Company failed to demonstrate a prima facie case for overturning the election. Before turning to whether the Company's allegations were sufficient, if credited, to result in overturning the election, NLRB v. Golden Age Beverage Co., 415 F.2d 26, 33 (5th Cir.1969), we address a preliminary argument urged by the Company.

The Company suggests that even if the affidavits it submitted to the Acting Regional Director did not state a prima facie case of election impropriety, the Regional Office had some duty, pursuant to 29 C.F.R. Sec. 102.69(c)(d) (1979), to conduct some further investigation. We are unaware of any precedent in this circuit addressing the narrow question whether the Region has a duty to interview witnesses or otherwise gather additional information if the materials supplied by the challenger fail to meet this initial burden. We do note that such a "duty" would be inconsistent with the provision of the Board's Case Handling Manual quoted supra. Because we believe that the Company did state a prima facie case of election impropriety, we need not and do not discuss further the Company's efforts to expand the investigatory requirement.

A. Racial, Religious, Ethnic Slurs
1. Factual Allegations

The Company objects to the remarks of a priest made at a Union meeting. The meeting was held at a Catholic church near the Company. The parish priest discussed the movie "Holocaust," which dealt with the Nazis' treatment of Jewish people during World War II. Witness A reported that the priest also said: "Paul and Mrs. Katz are Jewish and they're getting rich while we're getting poor. The priest said 'we should vote yes and that why should we make them rich because Jewish people are rich and we are poor and killing ourselves for them.' " There is no indication that the Union repudiated the priest's remark, either during that meeting or on any subsequent occasion.

The Acting Regional Director stated that there was no other evidence of racial, religious, or ethnic comments during the preelection period. Sylvia Katz, however, had filed an affidavit stating that during the week of September 24, 1979, employee Carol Delk had told other employees: "Jews killed the Nazis--that the Jews marched in Skokie to keep the Blacks out." Witness A reported in her affidavit that, on election day, employee Carol Delk spread the word that a plant supervisor had said: "All these dumb Mexicans you know what they

want--more money. They are greedy because they never had anything." 3

2. Legal Impact of the Statements

In Sewell Manufacturing Co., 138 N.L.R.B. 66 (1962), the employer had sought to influence his employees to reject the union by emphasizing the union's support of the black civil rights movement. To make his point, the employer circulated a photograph of a white union official dancing with a black woman. The Board set aside the election, stating:

So long ... as a party limits itself to truthfully setting forth another party's position on matters of racial interest and does not deliberately seek to overstress and exacerbate racial feelings by irrelevant, inflammatory appeals, we shall not set aside an election on this ground. However, the burden will be on the party making use of a racial message to establish that it was truthful and germane, and where there is doubt as to whether the total conduct of such party is within the described bounds, the doubt will be resolved against him.

Id. at 71-72 (emphasis in original) (footnote omitted). As noted by the Fifth Circuit, the principle underlying the Sewell rule is "that workers of one race should not be persuaded to vote for or against a Union on the basis of invidious prejudice they might have against individuals of another race." NLRB v. Sumter Plywood Corp., 535 F.2d 917, 924-25 (5th Cir.1976), cert. denied, 429 U.S. 1092, 97 S.Ct. 1105, 51 L.Ed.2d 538.

In NLRB v. Silverman's Men's Wear, Inc., 656 F.2d 53 (3d Cir.1981), the Third Circuit denied enforcement of a bargaining order issued by the Board. Six days before the union election, the Union's secretary-treasurer had referred to a Company vice-president as a ...

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