Marlene Industries Corp. v. N.L.R.B.

• Decision Date: 01 July 1983
• Docket Number: No. 81-1338,81-1338
• Citation: 712 F.2d 1011
• Parties: 113 L.R.R.M. (BNA) 3655, 98 Lab.Cas. P 10,300 MARLENE INDUSTRIES CORPORATION, et al., Petitioners, v. NATIONAL LABOR RELATIONS BOARD, Respondent, and International Ladies' Garment Workers' Union, Intervenor.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 1011

712 F.2d 1011

113 L.R.R.M. (BNA) 3655, 98 Lab.Cas. P 10,300

MARLENE INDUSTRIES CORPORATION, et al., Petitioners, v. NATIONAL LABOR RELATIONS BOARD, Respondent and International Ladies' Garment Workers' Union, Intervenor.

No. 81-1338.

United States Court of Appeals Sixth Circuit.

Argued Aug. 24, 1982.

Decided July 1, 1983.

Cornelius, Collins, Higgins & White, Charles Hampton White, Nashville, Tenn., J. Mack Swigert (argued), Taft, Stettinius & Hollister, Cincinnati, Ohio, for petitioners.

Max Zimny (argued), New York City, for intervenor.

Elliott Moore, Deputy Associate Gen. Counsel, Edward Dorsey (argued), N.L.R.B., Washington, D.C., for respondent.

Before KENNEDY and MARTIN, Circuit Judges, and SILER, ^* District Judge.

CORNELIA G. KENNEDY, Circuit Judge.

Petitioners ask that we review and set aside the order of the National Labor Relations Board ¹ (Board) finding petitioner guilty of unfair labor practices in violation of sections 8(a)(1) and (3) of the National Labor Relations Act, 29 U.S.C. §§ 158(a)(1) and (3), directing reinstatement of striking employees and awarding back pay. Petitioners urge that collateral estoppel bars many of the Board's findings and that the remaining findings are not supported by substantial evidence. The Board cross-petitions for enforcement of its order.

HISTORY

Marlene Industries Corporation (Marlene) is engaged through wholly owned subsidiaries ² in several southern states in the manufacture and sale of wearing apparel. Marlene has a history of having engaged in unfair labor practices. In 1967 the Board had found Marlene guilty of engaging in unfair labor practices and an enforcement order was issued by this Court in 1969, Marlene Industries Corp., 166 N.L.R.B. 703 (1967), enf'd, 406 F.2d 886 (6th Cir.1969), which included an injunction against further unfair labor practices.

In 1970 Marlene was again embroiled in accusations of unfair labor practices in the pressing department of the Decaturville plant. Pressers at Decaturville were compensated on the basis of the quantity of work each produced. As a result of various changes in quality control and inspection, many pressers complained of a decline in production because they suffered financially whenever required to spend time on inspection. The pressers met and discussed the changes, voiced grievances to supervisors, and engaged in a work stoppage for which they were reprimanded.

On June 23, 1970, a supervisor in the Decaturville pressing department inspected a bundle of slacks recently pressed by Nelson Rushing. The supervisor found 5 or 6 pairs requiring repressing and returned them to Rushing. Under previous quality control procedures, repressing is all that would have been required. The supervisor informed Rushing that under the new rule in effect he was required to inspect in its entirety any bundle returned with 3 or more defects. Rushing protested that it was not his job as a presser to inspect his own work and he refused to do so on his own time. Other pressers likewise refused. Rushing voiced his complaints to another supervisor but nothing was resolved in that encounter either. Rushing was then instructed to go to the office of the plant manager. Rushing feared being discharged in private and, therefore, refused to go. Eventually the plant manager, accompanied by the personnel director, approached Rushing in the employees' lunch room. When Rushing persisted in his refusal to go to the office, the plant manager fired him, handing him two checks and a separation slip which had been prepared just before the encounter ("the Rushing incident").

Fifty-one or so pressers left the Decaturville plant in support of Rushing. Non-pressers left as well and eventually workers at Marlene's other plants joined in the protest. ³ The strikes continued until about September 28, 1974.

On June 24, 1970, the day after the initial Decaturville walk-out, Marlene sent a letter to all pressers stating:

On June 23, 1970 you were discharged as an employee of this company because you refused to carry out the orders of the plant manager to perform your regular work.

The company does not approve of your action; however, we feel that perhaps your actions were prompted by your emotions and do not represent your real attitude about your job.

You are hereby offered immediate reinstatement to your former position and directed to report for work at 7:30 a.m. Friday, June 26, 1970. If you have not reported for work at the plant by 4:15 p.m. Monday, June 29, 1970, this company will conclude that you are no longer interested in employment at this plant.

JA Vol. I, p. 24; ALJ Lipton decision at p. 13.

The nine pressers who returned to work before the June 29th deadline were fully reinstated. The Board found that any striker offering to return to work subsequent to that date, however, was required to fill out a new-hire application, serve a 90-day probationary period, did not receive health insurance coverage until expiration of that probationary period, and was ineligible for certain vacation benefits. ⁴

On April 19, 1974, the Union ⁵ extended to Marlene, on behalf of the striking employees, an unconditional offer to return to work. Marlene responded with letters to individual employees, dated May 6, June 2, and August 30, 1974, offering reinstatement. The Board found Marlene's offers of reinstatement to be invalid, because not unconditional and because employees who did return were placed on probation or subjected to probationary restrictions regarding health insurance and vacation benefits.

When the Rushing incident occurred, the Board filed a contempt petition with this Court alleging that Marlene had violated the 1969 enforcement order by discharging Rushing and other pressers. The matter was referred to a United States District Judge as a Special Master who issued two decisional memoranda, dated October 5, 1973 and June 12, 1974, denying the Board's contempt petition. The Special Master's conclusion that the Board had failed to prove that Marlene was guilty of contempt was based upon particularized findings of fact. He found, for example, that Rushing was terminated for cause (Memorandum 10-5-73, p. 48a, p 11, JA Vol. II, p. 923); and that the Decaturville pressers were given a bona fide offer of full and immediate reinstatement on June 24, 1970, the day after they went on strike (Memorandum 10-5-73, p. 49a p 13, JA Vol. II, p. 924). On appeal from the Special Master's decision the Board accepted his findings of fact but challenged his conclusions of law. This Court issued a decision adopting the findings, conclusion, and recommendations of the Special Master. NLRB v. Decaturville Sportswear Co., Inc., 518 F.2d 788 (6th Cir.), cert. denied, 423 U.S. 913, 96 S.Ct. 217, 46 L.Ed.2d 141 (1975).

In 1976, the Board filed the present unfair labor practice action also predicted on the Rushing incident. Relying on the prior contempt proceeding, an Administrative Law Judge recommended dismissal of the action based on res judicata and collateral estoppel. The Board reversed the Administrative Law Judge holding that because the Special Master in the contempt proceeding applied a "clear and convincing evidence standard" to establish contempt, his decision could not bar a subsequent unfair labor practice proceeding in which a "preponderance of the evidence" standard would be applied. ⁶ The Board remanded the proceeding to a second Administrative Law Judge who found Marlene guilty of unfair labor practices. The Board accepted most of his findings.

Specifically, the Board found Marlene's offers of reinstatement dated May 6, June 2, and August 30, 1974 to be invalid because they were not unconditional. Employees who did return were not reinstated to their former wages and benefits. The failure to offer full reinstatement immediately upon receipt of an unconditional offer to return to work was found to be a violation of the National Labor Relations Act, §§ 8(a)(1) and (3). The Board found that the Decaturville and resulting sympathy strikes were unfair labor practice strikes. The Board ordered reinstatement for all strikers and back pay for certain listed strikers. Entitlement to back pay for others alleged to be strikers, but as to whom there was no evidence that they had engaged in the strike, was deferred to the compliance of the proceeding.

COLLATERAL ESTOPPEL

Marlene contends that the findings of a Special Master in a prior contempt proceeding, instituted by the Board because of the Rushing incident, preclude the Board from holding in this subsequent unfair labor practice proceeding that the strikers protesting the discharge of Rushing were unfair labor practice strikers.

This Court recently reiterated a summary of the related doctrines of res judicata and collateral estoppel as set forth in Montana v. United States, 440 U.S. 147, 153-154, 99 S.Ct. 970, 973, 59 L.Ed.2d 210 (1979).

A fundamental precept of common-law adjudication, embodied in the related doctrines of collateral estoppel and res judicata, is that a "right, question or fact distinctly put in issue and directly determined by a court of competent jurisdiction ... cannot be disputed in a subsequent suit between the same parties or their privies...." Southern Pacific R. Co. v. United States, 168 U.S. 1, 48-49 [18 S.Ct. 18, 27, 42 L.Ed. 355] (1897). Under res judicata, a final judgment on the merits bars further claims by parties or their privies based on the same cause of action. [citations omitted]

Under collateral estoppel, once an issue is actually and necessarily determined by a court of competent jurisdiction, that determination is conclusive in subsequent suits based on a different cause of action involving a party to the prior litigation. Parklane Hosiery Co. v. Shore, 439 U.S. 322, 326 n. 5, 99 S.Ct. 645, 649 n. 5, 58 L.Ed.2d 552 (1970); Scott, Collateral Estoppel by Judgment, 56 Harv.L.Rev. 1, 2-3 (1942); Restatement (Second) of Judgments § 68 (...