Cross Pointe Paper Corp. v. N.L.R.B.

• Citation: 89 F.3d 447
• Decision Date: 15 July 1996
• Docket Number: 95-2451,Nos. 95-2293,s. 95-2293
• Parties: 152 L.R.R.M. (BNA) 2812, 132 Lab.Cas. P 11,609 CROSS POINTE PAPER CORPORATION, Petitioner, Cross-Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent, Cross-Petitioner.
• Court: United States Courts of Appeals. United States Court of Appeals (7th Circuit)

Page 447

89 F.3d 447

152 L.R.R.M. (BNA) 2812, 132 Lab.Cas. P 11,609

CROSS POINTE PAPER CORPORATION, Petitioner, Cross-Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent, Cross-Petitioner.

Nos. 95-2293, 95-2451.

United States Court of Appeals,

Seventh Circuit.

Argued Jan. 10, 1996.

Decided July 15, 1996.

Mark E. Ferguson, Elizabeth L. Thompson, Bartlit, Beck, Herman, Palenchar & Scott, Chicago, IL, Laura H. Walter, Glass, McCullough, Sherrill & Harrold, Washington, DC, Gardner G. Courson (argued), Glass, McCullough, Sherrill & Harrold, Atlanta, GA, for Petitioner in both cases.

Charles P. Donnelly, Jr., N.L.R.B., Contempt Litigation Branch, Washington, DC, Elizabeth Kinney, N.L.R.B., Chicago, IL, Aileen A. Armstrong, David Seid (argued), N.L.R.B., Appellate Court, Enforcement Litigation, Washington, DC, for N.L.R.B. in No. 95-2293.

Marion L. Griffin, N.L.R.B., Contempt Litigation Branch, Washington, DC, Elizabeth Kinney, N.L.R.B., Region 13, Chicago, IL, Aileen A. Armstrong, David Seid (argued), N.L.R.B., Appellate Court, Enforcement Litigation, Washington, DC, for N.L.R.B. in No. 95-2451.

Before WOOD, Jr., CUDAHY, and ROVNER, Circuit Judges.

HARLINGTON WOOD, Jr., Circuit Judge.

Cross Pointe Paper Corporation ("Cross Pointe") petitions this court for review of a decision of the National Labor Relations Board ("the Board") certifying the United Paperworkers International Union ("the Union") as the collective bargaining representative of a unit of its employees. Cross Pointe also contests the refusal of the Board's regional director to transmit to the Board the witness statements that she collected during her ex parte investigation into Cross Pointe's election objections. The Board cross-petitions for enforcement of its decision and order. We deny enforcement of the Board's cross-petition to enforce, grant Cross Pointe's petition to set aside certification, and remand for further proceedings.

I. BACKGROUND

On September 15, 1993, the Union filed a petition with the Board seeking certification as the bargaining representative of Cross Pointe's production and maintenance employees. On November 4, 1993, a secret-ballot election was conducted by the Board's regional office pursuant to an agreement between the parties. In a close vote, a majority of those voting chose union representation. ¹

Cross Pointe subsequently filed objections to the election. Cross Pointe alleged that the laboratory conditions necessary for a free and fair election were undone by certain incidents occurring before and during the election, including: (1) the circulation of an ethnically offensive rumor; (2) coercive behavior on the part of certain Cross Pointe supervisors who favored union representation; (3) the loud and public complaining by one employee to the effect that the election was not secret; and (4) the keeping of an improper vote tally during the election by a union observer.

Pursuant to the Board's rules and regulations, the regional director conducted an ex parte investigation of Cross Pointe's objections during which employees and union officials were interviewed. 29 C.F.R. § 102.69(d). Based on this investigation, the regional director recommended the overruling of all of Cross Pointe's objections. No hearing was held. Cross Pointe then filed exceptions to the regional director's report with the Board; the regional director refused Cross Pointe's request to transmit to the Board all of the investigatory notes and witness statements that she had amassed during her ex parte investigation. Thereafter, a majority of a panel of the Board adopted the director's recommendations. The Union was subsequently certified as the employees' collective bargaining representative on January 9, 1995.

Cross Pointe has since refused to recognize the Union, admittedly for the purpose of seeking further review of the Board's election determination. In response, the Board's general counsel issued a complaint charging Cross Pointe with violating sections 8(a)(1) and (5) of the National Labor Relations Act (the "Act"), 29 U.S.C. §§ 158(a)(1) & (5). In its defense, Cross Pointe contended that the Union's certification was legally invalid. The general counsel then moved to transfer the case to the Board and for summary judgment. Cross Pointe unsuccessfully repeated its request, on several further occasions, that the regional director transmit the entire record of her investigation to the Board. On May 22, 1995, the Board granted the general counsel's motion for summary judgment. Cross Pointe then filed a petition for review in this court contesting the regional director's refusal to transmit the entire record to the Board and seeking the invalidation of the Union's certification. ² In the alternative, Cross Pointe seeks a hearing before the Board. The Board cross-petitioned for enforcement of its decision and order.

II. STANDARD OF REVIEW

Since Cross Pointe admits that it has refused to bargain and provide relevant information to the Union, we must uphold the Board's conclusion that Cross Pointe is in violation of sections 8(a)(1) and (5) of the Act, 29 U.S.C. §§ 158(a)(1) & (5), unless, as Cross Pointe argues, the Union was improperly certified in the first place. Beloit Corp., Castings Div. v. NLRB, 857 F.2d 1154, 1156 (7th Cir.1988). Our review in this area is very limited: "We must defer to the Board's reasonable selection of rules and policies to govern the election, and we will uphold the application of those rules if substantial evidence supported the Board's decision." Van Leer Containers, Inc. v. NLRB, 841 F.2d 779, 784 (7th Cir.1988) (citation omitted).

"Deference, however, does not entail complete abdication of the judicial role." K-Mart Corp. v. NLRB, 62 F.3d 209, 212 (7th Cir.1995) (citations omitted). For the reasons discussed below, we conclude that Cross Pointe's argument regarding the insufficiency of the record transmitted to the Board is well-founded and we therefore set aside the certification and remand this matter to the Board for additional proceedings. Thus, we need not reach Cross Pointe's other arguments regarding election misconduct. Prairie Tank S., Inc. v. NLRB, 710 F.2d 1262, 1265 (7th Cir.1983).

III. DISCUSSION

The Regional Director's Refusal to Transmit the Entire

Evidentiary Record to the Board

Cross Pointe contends that the Board abused its discretion by adopting the regional director's report without examining all of the evidence that the regional director relied upon in reaching her decision. By refusing to transmit the entire record, the regional director was acting pursuant to the Board's regulations:

In a proceeding pursuant to this section in which no hearing is held, the record shall consist of ... any documentary evidence, excluding statements of witnesses, relied upon by the regional director in his decision or report.... Materials other than those set out above shall not be a part of the record, except as provided in paragraph (g)(3) ³ of this section.

29 C.F.R. § 102.69(g)(1)(ii) (emphasis added).

Cross Pointe argues, however, that this procedure is violative of our ruling in NLRB v. Allis-Chalmers Corp., 680 F.2d 1166 (7th Cir.1982). In Allis-Chalmers we stated:

"We view the Board's position that it does not have to review the documentary evidence as an abdication of its responsibilities under the National Labor Relations Act. If the Board does not look at the evidence it can do nothing but rubber stamp the Regional Director's decision. Meaningful review is impossible without a review of the evidence. In addition, if the Board does not review the evidence and make it part of the record, it is impossible for a court to review the Board's action, since there is no record to review. We hold that it is an abuse of discretion for the Board to adopt the report of the Regional Director without reviewing the documentary evidence relied upon by the Regional Director."

Id. at 1169 (quoting NLRB v. North Elec. Co., Plant No. 10, 644 F.2d 580, 584 (6th Cir.1981)).

As the Board has noted, 29 C.F.R. § 102.69 was amended subsequent to the Allis-Chalmers decision. See 46 Fed.Reg. 45,922 (1981). Whereas we assumed in Allis-Chalmers that the regional director was not required to transmit any of the relied-upon evidentiary material, § 102.69 as amended now excludes only witness statements from mandatory transmission to the Board. The Board is incorrect, however, to state that we "expressly approved" these amendments in L.C. Cassidy & Son, Inc. v. NLRB, 745 F.2d 1059, 1065 (7th Cir.1984).

Although we did discuss the amended language of § 102.69 in L.C. Cassidy, we did not see fit to definitively rule upon this language because the employer neither contested the regional director's factual findings nor claimed that the record contained disputed factual issues which necessitated a hearing. Id. Instead, the company simply disputed the regional director's application of precedent to the facts. Id. For one reason or another, we have also declined to address the amended language on every other occasion when it arose. See Van Leer Containers, Inc. v. NLRB, 841 F.2d 779, 783 (7th Cir.1988) (finding that the amended § 102.69 clearly provided notice that the Board did not consider witness statements collected by the regional director to be a part of the record and that the company had thus waived its incomplete record argument by not raising it earlier); NLRB v. Browning-Ferris Indus. of Louisville, Inc., 803 F.2d 345, 350 (7th Cir.1986) (same); NLRB v. Affiliated Midwest Hosp., Inc., 789 F.2d 524, 533 (7th Cir.1986) (same); NLRB v. Speedway Petro., Div. of Emro Mktg. Co., 768 F.2d 151, 159 (7th Cir.1985) (same); and NLRB v. Howard Johnson Motor Lodge, 705 F.2d 932, 936 (7th Cir.1983) (declining to address the incomplete record argument in light of the decision--previously reached on other grounds--to remand for an evidentiary hearing). Thus, the question of the reasonableness of the post-amendment version...