Cherrin Corporation v. NLRB

• Decision Date: 13 August 1965
• Docket Number: No. 16045.,16045.
• Citation: 349 F.2d 1001
• Parties: CHERRIN CORPORATION, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.
• Court: U.S. Court of Appeals — Sixth Circuit

349 F.2d 1001 (1965)

CHERRIN CORPORATION, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.

No. 16045.

United States Court of Appeals Sixth Circuit.

August 13, 1965.

Marvin W. Cherrin, Dearborn, Mich., for petitioner.

George B. Driesen, Atty., N. L. R. B., Washington, D. C. (Arnold Ordman, Gen. Counsel, Dominick L. Manoli, Associate Gen. Counsel, Marcel Mallet-Prevost, Asst. Gen. Counsel, Melvin J. Welles, Atty., N. L. R. B., Washington, D. C., on the brief), for respondent.

Before MILLER and CECIL, Circuit Judges, and McALLISTER, Senior Circuit Judge.

McALLISTER, Senior Circuit Judge.

Miss Marilyn Cherrin is an employee of the Cherrin Corporation. She is the daughter of Phillip Cherrin, Secretary of the Cherrin Corporation and an owner of twenty per cent of its stock. Miss Cherrin is also a niece of all of the other officers and owners of the Cherrin Corporation.

Pursuant to a decision of the Acting Regional Director of the National Labor Relations Board, an election was held among all the clerical employees of the Corporation. At the conclusion of the election, there was served upon the Office Employees' International Union, Local 10, AFL-CIO, and upon the Corporation, a tally of ballots showing that of 14 ballots cast, 7 were for the Union, 6 were against the Union, and 1 ballot was challenged by the Union on the ground that the voter, Marilyn Cherrin, was the daughter of the owner of the Corporation. As this ballot was determinative of the results of the election, it was received and segregated to maintain its secrecy. Thereafter, the Union filed with the Acting Regional Director timely objections to the conduct of the election. As to the ballot of Marilyn Cherrin, the Acting Regional Director sustained the challenge. This resulted in the Union's having a majority of the votes; and it was certified as the bargaining representative of the employees of the clerical unit.

Thereafter, the Cherrin Corporation refused to bargain with the Union; a complaint was issued; all parties stipulated that the case should be transferred to the Board, without a hearing before a Trial Examiner; and a stipulation was entered to provide that the sole question to be decided was whether the Acting Regional Director erred in sustaining the challenge of the ballot of Marilyn Cherrin. The Board found that the Acting Regional Director properly sustained the challenge of the ballot of Miss Cherrin; that petitioner Corporation had unlawfully refused to bargain with the Union; and directed petitioner to cease and desist from refusing to bargain and to post appropriate notices. From the Board's order, petitioner seeks review.

The only issue presented by the parties is whether the Board's action in excluding Miss Cherrin from the bargaining unit of the clerical employees and sustaining the challenge of her ballot, was reasonable, proper, and authorized by the National Labor Relations Act.

It is contended by the Board that where an employee is the daughter of the Secretary, a twenty-per-cent shareholder in a small family-owned corporation, where her father actively participates in the business, where the other owners are also related to her, and where she is accorded special status, different from that accorded other employees in the bargaining unit, the Board is not prohibited from taking her family relationship into account in deciding whether the purposes of the Act will best be served by including her in a unit with other employees.

The Board's determination that Marilyn Cherrin enjoyed special status on account of her relationship to the management is based upon four findings that, unlike other employees: 1) she did not punch a time clock; 2) she was paid a weekly salary; 3) no record was kept of her absences on account of illness; and 4) she was not reprimanded or penalized for tardiness.

Petitioning Corporation contends that there is no authority under the Act, either by virtue of Section 2(3) or Section 9(b) thereof, authorizing the Director to exclude Miss Cherrin, admittedly an employee of the petitioner, from the bargaining unit, and thereby depriving her of her vote. In support of its contention, the petitioner relies upon the decision of this court in N. L. R. B. v. Sexton, 203 F.2d 940. In that case, the court held that where the Board excluded the employer's nephew, because of family relationship, from the appropriate bargaining unit and from participating in an election to select the bargaining agent, the order of the Board directing the employer to bargain collectively with the certified bargaining agent, would not be enforced in view of the fact that the Board did not have authority to exclude, for such reasons, any person other than a spouse or a child of the employer, under the National Labor Relations Act, Section 2(3), 8(a), (1, 5), 9, as amended, 29 U.S.C.A. §§ 152(3), 158(a) (1, 5), 159.

To the foregoing contention, the Board replies that the Sexton case is not here applicable since the Board in the instant case did not exclude Miss Cherrin from the election because of her relationship to the owners of the Corporation, but because of the special status accorded to her on account of such relationship. In this regard, the Board claims that the decision of this court in N. L. R. B. v. Volney Felt Mills, 210 F.2d 559, sustains its contention that the Board is not forbidden to consider family ties in making unit determinations. In the Volney case, the Board had sustained challenges to ballots cast by a son, a son-in-law, and a brother, of three supervisory workers, on the ground that these three employees had a diversity of interest from other production and maintenance employees, because of such privileges and special consideration in work assignments enjoyed by them, growing out of and due to their being relatives of the supervisory employees. In decreeing enforcement of the Board's order based on the election in the Volney case, this court said:

"The rulings of the Regional Director were not arbitrary or capricious since they were based upon reasonable grounds, including family relationship of challenged voters to supervisory employees, one of such supervisory employees being the general superintendent of the respondent, and it is to be noted that unless there was infirmity in each of the challenges the union would still have prevailed and a mistake of honest judgment does not constitute an arbitrary or capricious decision."

It is our conclusion that, while the Board would not have the right to exclude an employee from the unit, or from voting, solely because of relationship to the owner, it would not be an arbitrary and capricious decision of the Board to exclude an employee from the unit and voting, upon various reasonable grounds, including family relationship to the owners.

However, the findings of the Board that Miss Cherrin was accorded special status on account of her relationship to the owners of the Corporation rest on rather flimsy evidence; and we are left with the impression that the case against petitioner is pretty thin.

Miss Cherrin is not a child of the owner, since the owner is a corporation; and her vote could not thereby be excluded as a child of the owner under Title 29 U.S.C.A. § 152(3). Of course, her father is Secretary of the Corporation and a twenty-per-cent owner of the stock. But Miss Cherrin is not an individual in the employment of her f...