Amalgamated Clothing Wrks. of America v. NLRB, 19897

• Decision Date: 15 December 1966
• Docket Number: No. 19897,19940.,19897
• Citation: 125 US App. DC 275,371 F.2d 740
• Parties: AMALGAMATED CLOTHING WORKERS OF AMERICA, AFL-CIO, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent. NATIONAL LABOR RELATIONS BOARD, Petitioner, v. HAMBURG SHIRT CORPORATION, Respondent.
• Court: U.S. Court of Appeals — District of Columbia Circuit

125 US App. DC 275, 371 F.2d 740 (1966)

AMALGAMATED CLOTHING WORKERS OF AMERICA, AFL-CIO, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. HAMBURG SHIRT CORPORATION, Respondent.

Nos. 19897, 19940.

United States Court of Appeals District of Columbia Circuit.

Argued September 22, 1966.

Decided December 15, 1966.

COPYRIGHT MATERIAL OMITTED

Mr. Robert J. Rabin, New York City, of the bar of the Court of Appeals of New York, pro hac vice, by special leave of court, with whom Mr. Jacob Sheinkman, New York City, was on the brief, for petitioner in No. 19897.

Mr. Peter Ames Eveleth, Atty., N. L. R. B., of the bar of the Court of Appeals of New York, pro hac vice, by special leave of court, with whom Messrs. Arnold Ordman, Gen. Counsel, Dominick L. Manoli, Associate Gen. Counsel, Marcel Mallet-Prevost, Asst. Gen. Counsel, and Gary Green, Atty., N. L. R. B., were on the brief, for petitioner in No. 19940 and respondent in No. 19897.

Mr. Thurman Arnold, Washington, D. C., for respondent in No. 19940. Mr. Dennis G. Lyons, Washington, D. C., was on the brief for respondent in No. 19940.

Before BURGER, McGOWAN and LEVENTHAL, Circuit Judges.

LEVENTHAL, Circuit Judge.

The businessmen of the hamlet of Hamburg, Arkansas, (population 3000), eager to attract industry to their town, formed the Hamburg Industrial Development Corporation, and succeeded in inducing a major shirt manufacturing company to locate its new factory in Hamburg. The local chamber of commerce and the development corporation conducted labor surveys and arranged for testing some women residents on their ability to operate sewing machines. The local businessmen indorsed notes covering the cost of refurbishing the training building and covering the training period. Bonds totaling $300,000, secured by an increase in county real estate taxes, were issued to construct a plant for the factory. The cautious manufacturer created an independent subsidiary corporation for the Hamburg operation and included in the lease a term permitting the company to reject the plant if it found the specifications inadequate.

Not long thereafter, the Amalgamated Clothing Workers of America, AFL-CIO ("Union"), petitioner in No. 19897, commenced an organizing campaign among the employees of the fledgling Hamburg Shirt Corporation ("Company"), respondent in No. 19940. A number of workers signed union authorization cards, but the Company refused a request for recognition, and instead insisted on an election under the auspices of the National Labor Relations Board. As actively as the union solicited the employees for support, various civic leaders and some officials of the company advised the employees that it would be unwise or unnecessary for the Union to be brought to Hamburg. The findings of the Board concerning the Company's participation and responsibility are assailed on this appeal.

The Union lost the first representation election, but the Board's regional director set it aside on the ground that the interaction of the opposition campaigns of the local businessmen and plant officials had exceeded permissible bounds. While this ruling was pending before the Board, the Company engaged in other activities that the Union has complained of, namely allegedly unlawful intimidation of employees by surveillance of Union meetings and the discharge of several workers because of their union organizing. After a hearing, the Board agreed that the Company had violated Section 8(a) (1) of the National Labor Relations Act,¹ by announcing promises of benefit to discourage employee interest in the Union and by coercively interrogating them about their union activity while preparing for the Board's hearing. The Board also held the conduct of the business leaders imputable to the Company and made this a part of the basis for its finding of a Section 8(a) (1) violation. Further, the Board also found a violation of Section 8(a) (3), concluding that the discharges had been made because of union activity and not because of inefficiency or insubordination as the Company defended, and ordered reinstatement with back pay. On the refusal to recognize the claim to majority status, the Board held the Company's action reflected a desire to gain time to undermine the Union, and not a good faith doubt about the clarity of the union authorization cards signed by the employees. The Board accordingly found this a breach of Sections 8(a) (5) and (1). However, the Board declined to find unlawful surveillance of organizational meetings, and failed to grant affirmative relief as broad as the Union claims is appropriate if the consequences of the anti-union refrains are to be silenced.

Finding all of the Board's conclusions supportable by substantial evidence in the record as a whole, and convinced that in determining the Company's responsibility it could properly take into account the conduct of the business community, we enforce the order against the Company, affirm the refusal to find unlawful surveillance, and hold the relief granted to the Union sufficient, within the Board's discretion, to effectuate the policy of the National Labor Relations Act.

1. We turn first to the Board's decision to impute the anti-union conduct of the local business community to the Company, and to view the questionable activities of Company officials against this backdrop. Of significance in this regard was the intimate connection between community and Company. As already stated, the community leaders had taken the initiative in securing the Company's location in Hamburg. They had subsidized the labor surveys and advanced funds for construction of the facilities — on which the Company had a right of refusal. Although the direct financial stake moved from the businessmen to the town when the bond issue was passed and the development corporation reimbursed out of the proceeds, the early financial outlay by the businessmen obviously foreshadowed and signaled a more enduring business interest.

The general interest of the business leaders in industrialization profitable to the community was heightened by an earnest concern that success reward the enterprise of the "test case," i. e., Hamburg Shirt Corporation. In short, any threat to the economic welfare of the Company had more than merely detached interest for the town elders; they fully appreciated that injury to the Company's viability threatened the symbiotic relationship of town and company.

Moreover, the businessmen who had succeeded in bringing the Company to Hamburg were not thereafter passive spectators; they continued with a role that involved them directly in the factory's affairs. Employees with grievances with the Company turned to the community businessmen for help, and helpful they frequently were. They also freely recommended prospective employees to the management, and often these candidates were hired. They spoke to employees about shortcomings, in the eyes of management, in regard to both output and quality of work done. In speaking of plant activities to the employees they reflected an identity of interest and involvement with the Company, and their sentiments were well known to management. In a key instance the businessman who served as master of ceremonies at a Company open house spoke to the assembled employees that "we had planned to expand" and expansion was still a possibility "if we don't have any more trouble." The Company official who spoke at this event did not deny or qualify these remarks, and on a later day he stated that if the Union were successful "no one will ever know about the expansion plans or other plans."

In this setting responsibility under the Act is not controlled by refinements of the law of agency. The Company's silence may properly be taken by the Board as recognition or ratification of the role of those not formally included in the corporate organization chart. We emphasize also the familiarity of the community leaders with the Company's detailed production quotas and figures, which suffused their conversations with the employees, and their visits to the plant on many occasions to confer with Company officials. In such a context it was not at all unreasonable for the Board to approach the case as one where the Company may be held accountable for lack of disavowal of the businessmen's campaign in view of the employees' reasonable and predictable conclusion that the business leaders in inveighing against the Union were serving in effect as organs of...