Central Hardware Company v. NLRB

• Decision Date: 26 April 1971
• Docket Number: No. 20199.,20199.
• Citation: 439 F.2d 1321
• Parties: CENTRAL HARDWARE COMPANY, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent, and Retail Clerks Union, Local 725, Retail Clerks International Association, AFL-CIO, Intervenor.
• Court: U.S. Court of Appeals — Eighth Circuit

439 F.2d 1321 (1971)

CENTRAL HARDWARE COMPANY, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent, and Retail Clerks Union, Local 725, Retail Clerks International Association, AFL-CIO, Intervenor.

No. 20199.

United States Court of Appeals, Eighth Circuit.

March 24, 1971.

Rehearing Denied April 26, 1971.

COPYRIGHT MATERIAL OMITTED

Keith E. Mattern, St. Louis, Mo., Ronald L. Aylward, John F. Gillespie, St. Louis, Mo., for petitioner.

Marvin Roth, Atty., N. L. R. B., Washington, D. C., Arnold Ordman, Gen. Counsel, Dominick L. Manoli, Associate Gen. Counsel, Marcel Mallet-Prevost, Asst. Gen. Counsel, Elliott Moore, Atty., N. L. R. B., for respondent.

Robert Karmel, Chicago, Ill., for intervenor.

Before GIBSON and BRIGHT, Circuit Judges, and McMANUS, Chief District Judge.

PER CURIAM.

The petitioner, Central Hardware Company, seeks review of the National Labor Relations Board's order (reported at 181 N.L.R.B. No. 74) and the Board files a cross-application for enforcement of the order requiring petitioner to cease and desist from unfair labor practices found to be violative of §§ 8(a) (1) and (3) of the National Labor Relations Act (29 U.S.C. § 158) and affirmatively requiring the petitioner to revoke and withdraw its no-solicitation rule and to reimburse employee Ragle for a three-day loss of earnings.

The actions found to be violative of §§ 8(a) (1) and (3) of the Act occurred during an organizational campaign by representatives of the Retail Clerks Union, Local 725, Retail Clerks International Association, AFL-CIO, intervenor, at petitioner's two stores in the Indianapolis, Indiana area in 1968.¹ The petitioner (hereafter called Company) opened two retail stores on the outskirts of Indianapolis, Indiana, in the spring of 1968. The stores were designated as the East Store and the West Store. Hiring was commenced about April 15, 1968, culminating with a work force of some 125 employees for each store at the time of the openings on June 3, 1968. The Board found the Union began an organizational drive a week or so before the stores opened, but the record shows that the Company hired Edward Stahl, Jr., in April 1968 as an employee, not knowing that Stahl was an undercover agent for the Union and was paid to work full time for the Union in organizing the Company's Indianapolis stores. Stahl received full time salary both from the Union and from the Company and utilized his position to talk to the employees and solicit them to join the Union. He was instrumental in supplying a list of the employees, 80 per cent complete, to the union organizers.

Some 9 or 10 union organizers from both outside and within the Indianapolis area conducted a blitz-type campaign seeking signed authorization cards to establish the Union as the bargaining agent for the employees of both stores. During the first month of the campaign, commencing May 21, 1968, the Union received 92 signed authorization cards, but during the next three weeks of the campaign the Union only received 17 signed authorization cards. The decrease in the number of signed authorization cards was apparently due to the removal by the Union of most of its outside organizers and a decrease in activity of Indianapolis organizers who had other regular union functions to perform in connection with other employers.

The organizational campaign took place primarily on the Company's parking lots. The Company had a no-solicitation rule which it enforced against all solicitational operations in the stores and in the parking lots. A number of employees protested to the Company concerning the union organizational activity on the parking lots, complaining that they were detained in leaving the lot and were threatened; they sought protection when leaving the store at night. This complaint was, at the suggestion of management, placed in written form signed by 97 out of 125 employees at one of the stores and was directed to an executive official at St. Louis, Missouri. The signed complaint stated in effect that the undersigned employees did not want to be harassed any more by the Union and they did not wish to join this Union.

The Company accepted and expressed gratification for the complaint and instructed the Indianapolis management to keep all union organizers off the Company's premises, including the parking lots. After most of the Union's organizers had either left town or left the Company's premises, Mark Kapetanakis, a field organizer for the Union from Columbus, Ohio, and Stahl, the sub rosa union organizer, who had subsequently been discharged for cause, met on the lot of the West Store and started into the store. The store manager met them in the parking lot and told them he did not want them in the store or on the parking lot. Kapetanakis replied that he was going into the store as a customer and would not be talking to the employees about the Union. The manager again told Kapetanakis not to go into the store and if he did the police would be called. Stahl left but Kapetanakis went into the store. The police were called, talked to Kapetanakis and insisted that he leave the store. Upon refusal to leave he was placed under arrest, escorted to a police car and taken to the police station.

Shortly after the Company received the written complaint from the employees, it filed a charge of unfair labor practices against the Union. The Union in turn filed unfair labor practices against the Company on August 21, 1968, and on October 16, 1968. A combined complaint was filed by the General Counsel against the Company, the hearing of which was concluded on February 6, 1969. The Board found that the Company's employee no-solicitation rule was unlawfully broad and was discriminatorily applied, thus violating § 8(a) (1) of the Act; that interrogation of employees concerning a violation of the no-solicitation rule and the subsequent suspension of employee Ragle for violating that rule were violative of §§ 8(a) (1) and (3) of the Act; that the absence of a reasonable opportunity for the Union to otherwise reach employees and the quasi-public nature of the Company's parking lots, coupled with the allegedly unlawful non-employee no-solicitation rule, violated § 8(a) (1) of the Act; and that the Company's interrogation of employee Ragle concerning her union sympathies and a speech by vice president Reed exceeded the permissible bounds of free speech, violating § 8(a) (1) of the Act.

NO-SOLICITATION RULE

A. Employees.

The Board found that the Company's employee no-solicitation rule was overly broad and was also discriminatorily applied in that the Company allowed anti-union solicitation while taking a strict stand against all other types of solicitation. Employee Ragle was suspended for three days for violation of the Company's employee no-solicitation rule. The Company's rule on employees' solicitation was quite broad and prohibited solicitations on the Company's premises without limitation as to time or place, in the absence of Company approval. It is evident that such a broad employee no-solicitation rule is invalid as constituting an interference with the employees' rights to concerted action. As a matter of congressional policy, employees under § 7 of the Act (29 U.S.C. § 157) have the right to organize and engage in concerted action for purposes of mutual protection and collective bargaining; and employees by an amendment of the Act in 1947 also have the right to refrain from such activity. Under § 8(a) (1) of the Act (29 U.S.C. § 158), an employer must respect an employee's § 7 rights and may not interfere, restrain or act coercively with respect to these rights.

The Supreme Court in Republic Aviation Corp. v. NLRB, 324 U.S. 793, 65 S.Ct. 982, 89 L.Ed. 1372 (1945) upheld the Board's authority to view overly broad employee no-solicitation rules as interfering with the employees' § 7 rights and thus constituting unfair labor practices under § 8(a) (1). Both the Board and the Court, in balancing the respective rights of management to conduct its own affairs and the employees to freely organize, recognized that the employer may make and enforce reasonable rules governing the conduct of employees on company time. Absent discriminatory factors, this would include prohibiting union solicitation by employees during working hours; but an employee's time outside working hours, even though on the company's premises, as during the luncheon hour, rest periods or after work, were his to use as he wishes, and the employees' activities during the non-working periods may not be unreasonably restrained. Republic Aviation Corp. v. NLRB, supra at 803, 65 S.Ct. 982. Therefore, any rule prohibiting employee union solicitation outside of working hours is viewed as an unreasonable impediment to self-organization and discriminatory, absent evidence that such a rule is necessary in order to maintain production or discipline.

An employer in the retail business may in addition prohibit employee solicitation in selling areas during nonworking time as such solicitation could prove disruptive of the selling operation. However, the prohibition may not extend to the non-selling areas of the company's premises. NLRB v. May Department Stores, 154 F.2d 533, 537 (8th Cir.), cert. denied, 329 U.S. 725, 67 S.Ct. 72, 91 L.Ed. 627 (1946).

Also, even a valid no-solicitation rule, properly circumscribed as set forth above, may be violative of § 8(a) (1) if the rule is enforced in a disparate or discriminatory manner. NLRB v. Electro Plastics Fabrics, Inc., 381 F.2d 374 (4th Cir. 1967); Revere Camera Co. v. NLRB, 304 F.2d 162 (7th Cir. 1962); NLRB v. May Department Stores, 154 F.2d 533, 537 (8th Cir. 1946). It is thus clear that an employer violates § 8(a) (1) of the Act by a broad employee no-solicitation rule which prohibits union solicitation on all company property even during non-working periods and in non-working areas. Republic Aviation, supra; Jas. E. Matthews & Co. v. NLRB, 354 F.2d 432 (8th Cir....