America's Best Quality Coatings Corp. (ABQC) v. N.L.R.B.

• Decision Date: 04 January 1995
• Docket Number: 94-1173,Nos. 93-4039,s. 93-4039
• Citation: 44 F.3d 516
• Parties: 148 L.R.R.M. (BNA) 2136 AMERICA'S BEST QUALITY COATINGS CORPORATION (ABQC), Petitioner-Cross-Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent-Cross-Petitioner, and United Electrical, Radio and Machine Workers of America, (UE), Intervenor-Petitioner. , and 94-1198.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 516

44 F.3d 516

148 L.R.R.M. (BNA) 2136

AMERICA'S BEST QUALITY COATINGS CORPORATION (ABQC) Petitioner-Cross-Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent-Cross-Petitioner and United Electrical, Radio and Machine Workers of America (UE), Intervenor-Petitioner.

Nos. 93-4039, 94-1173, and 94-1198.

United States Court of Appeals Seventh Circuit.

Argued Oct. 4, 1994.

Decided Jan. 4, 1995.

James R. Scott, Alan M. Levy (argued), Lindner & Marsack, Milwaukee, WI, for petitioner.

John C. Truesdale, Robert J. Englehart, Contempt Litigation Branch, Aileen A. Armstrong, Linda J. Dreeben, Deborah E. Shrager (argued), Appellate Court, Enforcement Litigation, Washington, DC, Joseph A. Szabo, Director, N.L.R.B., Milwaukee, WI, for N.L.R.B.

Mary E. Leary (argued), Pittsburgh, PA, Terry Davis, Elizabeth Levie, United Electrical, Radio & Machine Workers of America, Milwaukee, WI, for United Electrical, Radio and Machine Workers of America.

James R. Scott, Alan M. Levy (argued) Lindner & Marsack, Milwaukee, WI, for ABQC Corp., America's Best Quality Coatings Corp.

Before CUDAHY and FLAUM, Circuit Judges, and ROSZKOWSKI, District Judge. ^*

FLAUM, Circuit Judge.

In this appeal, we consider a petition to set aside and a cross-petition to enforce an order of the National Labor Relations Board ("NLRB" or "Board"), which found that the petitioner employer, America's Best Quality Corporation ("ABQC" or the "company"), violated Secs. 8(a)(1), (3), and (5) of the National Labor Relations Act (the "Act"), 29 U.S.C. Secs. 158(a)(1), (3), (5). The Board also concluded that Staff Right, Inc. ("Staff Right"), ABQC's employment and hiring agency, was a joint employer with ABQC, but was not jointly liable for these unfair labor practices. As a remedy, the Board's order required ABQC to cease and desist from any further unfair labor practices, and to reinstate terminated employees with lost wages and benefits. Furthermore, the order required ABQC to recognize the United Electrical Radio and Machine Workers of America Union (the "union"), and, on request, bargain with the Union as the exclusive collective bargaining representative of the employees. On appeal, ABQC challenges the appropriateness of the bargaining order and the Union challenges the Board's conclusion of no liability for Staff Right. We enforce the Board's decision and order.

I.

ABQC is a closely held metal plating corporation located in Milwaukee, Wisconsin. ABQC began operations in June, 1990, after purchasing the corporate entity from the then union-organized Allen Bradley Company. Gene Plonka was ABQC's first President. During the first several months of employment, ABQC employees were promised both pay raises and additional vacation time, each effective one year after the employment began. In October, 1990, Robert Peterson succeeded Plonka as ABQC's President.

By March, 1991, ABQC employees had become concerned about the status of their promised raises and vacation time. Employees Michael Proffitt, Keith Mills, Lisa Nixon, Robert Person, Virginia Boyde, Sonny Anderson, and Curtis Celske circulated a union organizing petition and contacted union organizer Beth Levie. Thirty three employees signed this petition. In early April, the employees showed the petition to company supervisors Jane Lewandowski and Keith Stanosz, and demanded to be recognized as a group or union.

On April 12, Levie obtained 20 signed union authorization cards. By April 18, the union had 34 cards from ABQC's 64 employees. The Union formed an employee organizing committee. On April 18, this committee, along with union organizers Bob Clark and Levie, went to ABQC's offices and demanded voluntary recognition of the Union. After the company rejected this request, the Union filed a representation petition with the Board's regional office.

The following day, ABQC President Peterson announced that for an indefinite period, employees would be transferred from ABQC's payroll to Staff Right's payroll. Staff Right is a temporary employment agency that provides skilled and unskilled workers in the Milwaukee area which ABQC utilized to fill its employment needs. He stated that this "float" was the result of "cash flow" problems. This announcement scared the employees, who now believed that they were only "temporary" employees with less job security than before the transfer. On April 25, a group of 20-30 employees once again demanded union recognition by Peterson. He again refused. Both the Union and the company engaged in a variety of campaign activities in the weeks prior to the agreed upon election. ABQC's "game plan" opposing the union organizing effort included weekly meetings, mandatory speeches and questioning of employees. The union campaign included telephone calls and personal visits to employees as well as the distribution of literature.

ABQC engaged in several other campaign tactics to thwart unionization efforts. In a break from its usual practice, the company hired eight new employees just prior to the May 11 election eligibility cut off date. In the days leading up to the election, company officials questioned employees about their union views and threatened that they would enforce stricter working conditions if the employees voted for union representation. Peterson also required an employee to remove a pro-union leaflet, while not requiring the removal of anti-union signs. On June 17, at a mandatory employee meeting, Peterson informed the employees that he could not give any raises or change vacation schedules, despite the elimination of the cash flow problem, because of the pending election. On June 21, the union representation election was held pursuant to an election agreement. 68 of the 72 eligible voters cast ballots: 30 for the Union, 29 against, and 9 ballots which the Union challenged.

On July 15, the company gave employees (and union organizing committee members) Proffitt, Mills, and Hicks warnings for poor attendance. On July 17, the three employees presented Peterson with a grievance, which he refused to accept because he did not formally recognize the Union. On the next day, 30 employees approached Peterson and demanded the raises and vacation time they had previously been promised. Peterson refused to act until the NLRB ruled on the pending union election challenges and objections.

On that same day, several storage tanks were sabotaged by acid from the metal plating machines, thus requiring the shut-down of those production units. With the machines no longer functioning, Peterson released the First Shift employees for the rest of the day. The following morning, the company refused to allow those employees to enter the plant and informed the employees that they were laid off until further notice. On July 22, the released employees began picketing the plant to protest their layoffs. On July 27, the company began to reinstate some of the First Shift employees, as the production needs required. Furthermore, the company notified its employees that it had decided to grant eligible employees the requested vacation time and merit wage reviews.

Although the company began recalling the laid off employees in late July, it did not do so based on seniority, experience or machine qualifications. Rather, the company recalled less senior employees ahead of the members of the union organizing committee. In fact, it did not recall any of the committee members until late October. In August, Peterson and company attorneys met separately on several occasions with Mills and Proffitt to discuss their involvement in the acid incident. Despite their denials, the company confronted both employees with evidence that they had sabotaged the plant. On February 24, 1992, after further investigation, the company discharged Mills and Proffitt.

Towards the end of October, ABQC decided to recall Nixon. A week after giving her a required drug test, the company notified Nixon that the test had been positive and that she no longer could work for the company. Despite Nixon's denial of any drug use, and her insistence on receiving a copy of the written drug report, the company refused to reconsider her discharge or provide her with the report.

In early September, 1991, the company also unilaterally issued its first employee handbook, making changes in the terms and conditions of employment, including wage structure, work hours, and policies regarding sexual harassment, drugs and alcohol, report pay, call-in pay, outside employment, solicitation, progressive discipline, paid time off, holidays and seniority. In late March, 1992, ABQC also unilaterally created formal job classifications, each with its own pay structure and wage range. ABQC modified the wage ranges for all job classifications in June, 1992.

On March 25, 1992, the Union filed unfair labor practice charges against ABQC. On June 15-18, 1992, and August 10-13, 1992, hearings were held on these charges. On March 1, 1993, the Administrative Law Judge ("ALJ") made detailed findings of fact and conclusions of law regarding these charges. The ALJ found that ABQC had violated Secs. 8(a)(1), (3), and (5) of the Act, and ordered ABQC to cease and desist from further misconduct. The ALJ also ordered the reinstatement of discharged employees and issued a bargaining order. On November 26, 1993, on review, the Board affirmed most of the ALJ's findings and concluded that ABQC had violated Secs. 8(a)(1), (3), (5) of the Act. The Board also found that 5 of the 9 election ballots challenged by the Union should be overruled, resulting in a 34 to 30 vote against the Union. Finally, the Board imposed a cease and desist order as well as a bargaining order to remedy these unfair labor practices. This enforcement action followed.

II.

ABQC does not appeal the unfair labor practice findings, but rather only challenges the Board's bargaining order as an improper remedy. ABQC argues that because it did not prevent a fair election, a bargaining order...