AE Staley Mfg. Co. v. National Labor Relations Board

• Decision Date: 26 February 1941
• Docket Number: No. 7301.,7301.
• Parties: A. E. STALEY MFG. CO. v. NATIONAL LABOR RELATIONS BOARD.
• Court: U.S. Court of Appeals — Seventh Circuit

117 F.2d 868 (1941)

A. E. STALEY MFG. CO. v. NATIONAL LABOR RELATIONS BOARD.

No. 7301.

Circuit Court of Appeals, Seventh Circuit.

November 14, 1940.

On Request for Decree of Enforcement January 30, 1941.

Rehearing Denied February 26, 1941.

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Carl R. Miller and Chas. C. Le Forgee, both of Decatur, Ill., for petitioner.

Chas. Fahy and Robt. B. Watts, National Labor Relations Board, both of Washington, D. C., for respondent.

F. R. Wiley, of Decatur, Ill., for intervener Independent Starch Workers Union.

Joseph Padway and Herbert S. Thatcher, both of Washington, D. C., for intervener United Grain Processors.

Before MAJOR and TREANOR, Circuit Judges, and LINDLEY, District Judge.

MAJOR, Circuit Judge.

This case is here upon petition by A. E. Staley Manufacturing Company (hereinafter referred to as "petitioner") to review and set aside an order of the National Labor Relations Board, (hereinafter referred to as the "Board") issued against petitioner pursuant to 29 U.S.C.A. § 160 (c), Section 10(c) of the National Labor Relations Act, 49 Stat. 449, 29 U.S.C.A. § 151 et seq. The Board, in its answer, has requested enforcement of its order.

Complaint was issued on December 2, 1938, upon charges filed by United Grain Processors, Local No. 21490 (hereinafter referred to as "United"), a labor organization affiliated with the American Federation of Labor. In addition to jurisdictional allegations, the complaint alleged, in substance, that petitioner had dominated and interfered with the formation and administration of, and contributed support to three successive labor organizations of its employees, namely, the Employees' Representation Plan (hereinafter referred to as the "E.R.P."), the Staley Employees' Organization (hereinafter referred to as the "S.E.O."), and the Independent Starch Workers' Union (hereinafter referred to as the "I.S.W.U."), and had otherwise interfered with its employees' rights of self organization, thereby violating Section 8(1) and (2) of the Act. Petitioner, by answer, denied that it had engaged in any unfair labor practices. A hearing was had before an Examiner from December 12 to 16, 1938, participated in by the Board, petitioner, and the I.S.W.U. On February 1, 1939, the Trial Examiner filed an intermediate report finding that petitioner had dominated, interfered with, and supported the E.R.P. and the S.E.O., but not the I.S.W.U. The United filed exceptions to the intermediate report insofar as it related to the I.S.W.U. Thereafter, all the parties filed briefs and participated in oral arguments before the Board. On April 2, 1940, the Board issued its decision setting forth its findings of fact, conclusions of law, and order, wherein the charges, as made in the complaint, were sustained. Petitioner was required to cease and desist from the unfair labor practices complained of, and to withdraw all recognition from, and completely disestablish the I.S.W.U. as the representative of its employees for the purpose of collective bargaining; to refuse to recognize the E.R.P. and the S.E.O. as such representatives; to reimburse each employee for dues which were checked off his wages while a member of the S.E.O. or the I.S.W.U., and to post appropriate notices.

Petitioner is a Delaware corporation, having its principal place of business in the City of Decatur, Illinois. It is engaged in the manufacture, preparation, process, sale and distribution of corn and soybean products. Petitioner employed between eleven and twelve hundred workers, paid on an hourly basis; approximately one hundred ten foremen and assistants, and some two hundred in the administrative office and sales department, all paid on a monthly basis.

The chief issue presented is whether there is substantial support for the Board's finding that petitioner dominated and interfered with the formation and administration of, and contributed support to, the I.S.W.U. This is so as we view the situation for the reason that both the E.R.P. and the S.E.O. had, for all practical purposes, ceased to be labor organizations and, without dispute had been denied recognition by petitioner as a bargaining agent prior to the time of the organization of the I.S.W.U. In view of the great stress laid upon the character of these prior organizations by the Board, however, it appears necessary to make some review of their history and activities.

Prior to the middle of 1935, there was no labor organization at petitioner's plant. About that time, and apparently prior to the passage of the National Labor Relations Act, the E.R.P. was organized. At the request of one Leo Richards, an hourly paid employee, permission was obtained from petitioner's president to circulate petitions in the plant requesting that such an organization be formed. The petitions were mimeographed on petitioner's machine. Richards was informed at that time by petitioner's president that if such an organization was formed, it must be as the result of the voluntary action of the employees. At the request of the employees, petitioner's president and personnel manager appeared at the organization meeting, where petitioner's neutral attitude was explained. On July 11, 1935, petitioner addressed a letter to all employees, outlining the situation with respect to such organization. The Board stresses the statement of petitioner's opinion as expressed in this letter "that it will prove to be a benefit to the employees and to the management as well." That expression, however, is followed by the following statement: "If we do have a plan, it will be your plan, formulated and approved by you or your representatives. It will not be a company union or dominated by the company. We are advised by counsel that such a plan is entirely legal. * * * If you do not want it, there is no obligation of any sort on anyone to sign. We want to make it clear that the company has not and will not use any form of coercion or pressure on anyone in a thing of this kind." About the same time there was distributed in the plant by the personnel manager, with the consent of petitioner's president, a pamphlet entitled "What is an Employee Representation Plan"? The information contained therein was in question and answer form. The pamphlet is too lengthy to set forth here, but the Board contends that its purpose was to point out the advantages of an employees' representation plan over unionism. We have carefully read this pamphlet and we doubt if it is susceptible of such a construction, but if so, it points out with equal or greater force the advantages of such a plan over a company union.

Again, in a memorandum dated July 19, 1935, petitioner made certain suggestions to its employees with reference to the procedure which might be used in connection with the organization. This memorandum concluded as follows: "We wish to make it clear that this memorandum is merely a suggestion which you are entirely free to accept or reject. We also wish to make it clear that the plan and method of election of your representatives is entirely in your hands. We will offer advice only if requested by your temporary representatives." Again it is pointed out that petitioner's president agreed with the temporary representatives to defray all expenses of the plan's formation. In this connection it also should be stated that this was done at the express request of the employees. The Board concludes that these and other facts, not necessary here to relate, "conclusively demonstrate that the E.R.P. was petitioner's creature," and, therefore, constituted a violation of the act. That it violated the act is not disputed by petitioner, but it is argued that petitioner acted in the utmost good faith in the matter, and that as soon as petitioner discovered that mimeographing, financial support, and similar services rendered by petitioner were objectionable, it immediately notified the members of the E.R.P. that such assistance would be discontinued. In this connection, petitioner's president testified: "At the time the employees' representation plan was established, there was no interpretative decisions of the National Labor Relations Board then issued by the Board. There had been no Board cases or no test cases at the time it was established." He further testified in substance that they were aware that the act prevented any sort of domination or control of a labor organization, but they did not think it was contrary to the spirit of the law for the company to render certain services, such as the printing of ballots, printing of minutes, or permission to meet on company property when requested by the employees.

Shortly after this support was discontinued, the S.E.O. was formed. Petitioner contributed no money or material to this organization, but at the request of its representatives, typed certain minutes of joint meetings between representatives of the S.E.O. and representatives of petitioner. The S.E.O. was sponsored by certain employees, some of whom had been active in the E.R.P. Their activities were carried on under the direction of an attorney who had no connection with petitioner and who was employed and paid for his services by the employees. In drafting the by-laws of the new organization, certain features of the E.R.P. were retained, and it is this feature that the Board criticizes and from which it argues that the S.E.O. was merely a continuation of the E.R.P. and, therefore, company controlled. It seems to us, however, that this theory has little, if any, foundation in view of the testimony of John Talley, a member of the United, one of the Board's principal witnesses and who served as a committee member in the early stages of the S.E.O. According to his testimony, he conferred with petitioner's president as to how far they could go in changing the E.R.P., and that he was told "as far as we wanted to." Talley also testified that petitioner's president refused a request that petitio...