SH Kress & Company v. NLRB

• Decision Date: 24 August 1970
• Docket Number: No. 28744.,28744.
• Citation: 430 F.2d 1234
• Parties: S. H. KRESS & COMPANY, Petitioner-Cross-Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent-Cross-Petitioner.
• Court: U.S. Court of Appeals — Fifth Circuit

430 F.2d 1234 (1970)

S. H. KRESS & COMPANY, Petitioner-Cross-Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent-Cross-Petitioner.

No. 28744.

United States Court of Appeals, Fifth Circuit.

August 24, 1970.

Alan D. Eisenberg, Madeline Balk, Seligman & Seligman, New York City, for petitioner; Elbert H. Coles, New York City, on the brief.

Arnold Ordman, Gen. Counsel, Dominick L. Manoli, Associate Gen. Counsel, Marcel Mallet-Prevost, Asst. Gen. Counsel, Eugene B. Granof, Daniel M. Katz, Attys., National Labor Relations Board, Marcel Mallet-Prevost, Asst. Gen. Counsel, N.L.R.B., Wash., D. C., for respondent.

Before TUTTLE, THORNBERRY and INGRAHAM, Circuit Judges.

THORNBERRY, Circuit Judge:

This case is before us upon the petition of S. H. Kress & Company to review and set aside an order of the National Labor Relations Board directing the Company to recognize and bargain collectively with Tulsa General Drivers, Warehousemen and Helpers, Local Union 523, an affiliate of the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America. The Board's bargaining order was predicated upon the results of an election that the Board conducted among certain of the Company's employees in May of 1968. There were approximately 28 eligible voters; 18 ballots were cast for the Union, nine against the labor organization and one vote was challenged. The Company argues that because the Union made certain material misrepresentations the night before the election, the election was invalid and that therefore the Board's order directing the Company to recognize and bargain collectively with the Union should be set aside. The Board opposes the petition for review and moves for enforcement of its order. We have concluded that the Board abused its discretion, and therefore deny enforcement.

The election eve communication of which the Company complains is set out in full below, with the contested sections italicized:

TO ALL EMPLOYEES OF S. H. KRESS WAREHOUSES

We will bring you up to date on the progress of your upcoming election which will determine if you will have the strength of the Teamsters to bargain for you or if you will stand alone. Your employer knows the strength of our Union and has called in the Top Labor Relations Man to try to brain wash you and defeat your purpose of collective bargaining. But, when an employer is "running scared," he will resort to most any tactic. On Mar. 1, 1967, over 8,000 T.V. and Radio Studio employees voted overwhelmingly to become affiliated with the Teamsters and stated that they knew the strength of the 1.7 million members of the Teamsters Union. You need this strength, too.

Every business representative of this Local Union worked as a truck driver, dockman, milkman or warehouseman before the other members chose them as representatives. They are fully familiar with the problems You face.

All Union contracts provide that seniority shall prevail in matters of layoff, promotions, and scheduling of vacations, etc. It further states that the employer shall not discharge any employee without just cause and shall give at least one warning letter of the complaint in writing against such employee. If the employee feels he has been unjustly dealt with, he may request an investigation and if it proves that he was unjustly dealt with, He Shall Be Reinstated To His Job And Paid For All Time Lost. At the present, you have no job security and can be fired or demoted if you lose favor with the terminal manager and you have no appeal from his decision.

You came to us, seeking help! We firmly believe in helping others to help themselves. Your initiation fee will be $16.00 which includes dues for the first month, and is payable after the contract is signed. The dues are $7.00 per month and the only assessment is a death assessment in the amount of $3.00 which goes into a Death Benefit Fund for the benefit of the wife. In case of death of a member, this Local Union immediately issues a check in the amount of $1,000.00 to apply on burial expense.

Since this Local Union was founded in 1934, we have Never failed to secure better wages, vacations, hospital plans, pension plans, and many, many fringe benefits. The Employees, themselves, decide the wages, working conditions and fringe benefits they want in their contract. Management is interested in your personal welfare only as long as you work for substandard wages and the company shows a nice profit from Your labors. Your employer knows that if the Union wins the election, Your wages and benefits will be greatly increased.

We are aware that your employer has granted a few benefits, but if he doesn\'t intend to change them or deny them in the near future, Why would he hesitate to put it in writing???

The election to be held May 10, 1968 will be by secret ballot. Neither the employer or the Union will know how you vote. Everyone should vote for his own protection and peace of mind. We ask that you give this serious consideration, discuss it with your family, and there is no doubt in our mind that you will vote "Yes" and receive the benefits of 1.7 million other Teamster members are now receiving.

I.

The question for this Court is simply stated: Whether the Board has reasonably exercised its discretion in determining that the election was a fair and proper one, thus entitling the elected representative to recognition by the Company. In N.L.R.B. v. Golden Age Beverage Company, 5th Cir. 1969, 415 F.2d 26, this Court took pains to state precisely the standard of review in cases such as this, and we take the liberty of quoting at length from that opinion.

Certain well established principles guide this inquiry. Most important is the wide discretion Congress has entrusted to the Board in its conduct and supervision of elections, * * * and the considerable weight which must therefore be accorded to the Board\'s findings, with judicial review narrowly limited to ascertaining only their reasonableness. * * * "the only question presented to the Courts in an election review is whether the Board has reasonably exercised its discretion. * * *" Whether this Court would reach the same conclusion as the Board from the conflicting evidence is immaterial, so long as the Board\'s finding that the election was fairly conducted is supported by substantial evidence in the record considered as a whole. * * *

Further, in reviewing the Board\'s disposition of the Company\'s objections to the election, it "must be kept in mind that the burden is on the party objecting to the conduct of the representation election to prove that there has been prejudice to the fairness of the election". * * * This is a heavy burden; it is not met by proof of mere misrepresentations or physical threats. Rather, specific evidence is required, showing not only that the unlawful acts occurred, but also that they interfered with the employees\' exercise of free choice to such an extent that they materially affected the results of the election.

With an eye to these standards, we move to a consideration of the Company's specific objections to the Union's election-eve leaflet.

II.

The Company's basic argument is that the alleged misrepresentations in the Union's leaflet caused the election to be conducted in less than the laboratory conditions required by the courts, so that the employees were denied an opportunity to exercise their franchise in a free and untrammelled atmosphere. The Company claims that the following statements by the Union were material misrepresentations: "Your initiation fee will be $16.00 which includes dues for the first month, and is payable after the contract is signed. The dues are $7.00 per month * * *." The Company asserts that it proved that the Union's statement concerning the sixteen dollar initiation fee was false by submitting a copy of the By-Laws of the Union, which provides that the initiation fee shall be $12.00 to $15.00 and copies of the records of another employer which showed that the Union charged those employees initiation fees of $25.00 per employee plus dues. From this evidence, the Company concludes that "clearly * * * the Union's statement that its initiation fee is only $16.00 is patently false."

We disagree. To begin with, the Union did not state that its initiation fee was $16.00, but that "your" (meaning the Kress...