Dayton Hudson Dept. Store Co. v. N.L.R.B.

• Decision Date: 29 March 1996
• Docket Number: 94-6281,Nos. 94-6092,s. 94-6092
• Citation: 79 F.3d 546
• Parties: 151 L.R.R.M. (BNA) 2865, 131 Lab.Cas. P 11,542 DAYTON HUDSON DEPARTMENT STORE COMPANY, a Division of Dayton Hudson Corporation, Petitioner/Cross-Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent/Cross-Petitioner, International Union, United Automobile, Aerospace And Agricultural Implement Workers Of America (UAW), Intervenor.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 546

79 F.3d 546

151 L.R.R.M. (BNA) 2865, 131 Lab.Cas. P 11,542

DAYTON HUDSON DEPARTMENT STORE COMPANY, a Division of Dayton Hudson Corporation, Petitioner/Cross-Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent/Cross-Petitioner International Union, United Automobile, Aerospace And Agricultural Implement Workers Of America (UAW), Intervenor.

Nos. 94-6092, 94-6281.

United States Court of Appeals Sixth Circuit.

Argued Dec. 7, 1995.

Decided March 29, 1996.

On Petition to Review and Cross-Application to Enforce an Order of the National Labor Relations Board.

Timothy K. Carroll (argued and briefed), John F. Birmingham, Jr., Dykema & Gossett, Detroit, MI, for Petitioner Cross-Respondent.

Joan Hoyte-Hayes (briefed), National Labor Relations Board, Office of the General Counsel, Aileen A. Armstrong, Dep. Associate General Counsel, National Labor Relations Board, Appellate Court Branch, Margaret Gaines Neigus (argued), National Labor Relations Board, Washington, DC, for Respondent Cross-Petitioner.

Jordan Rossen, Nancy Schiffer (argued and briefed), Associate General Counsel, International Union, UAW, Detroit, MI, for Intervenor.

Before: MERRITT, Chief Judge; WELLFORD and BATCHELDER, Circuit Judges.

WELLFORD, Circuit Judge.

Petitioner Dayton Hudson Department Store Company ("Hudson") operates a chain of retail department stores in the Midwest. In 1990, some of the employees of Hudson's store at the Westland Mall in Westland, Michigan, began an effort to organize and bring in the UAW. On May 11, 1990, an authorized ballot of eligible workers took place; 274 votes were cast for the union and 179 against. Thereafter, Hudson filed timely objections with the NLRB, contending that the outcome of the election was tainted by a letter sent to all employees on May 8, 1990. ¹

The letter at issue, mailed just three days before the election, began with the greeting "Dear Fellow Hudson's Employee," contained a number of references to "we" and "us," and addressed anti-union arguments and tactics employed by Hudson. The letter falsely represented, among its other statements, that Hudson "claimed profits of OVER 60 MILLION DOLLARS in our Westland Hudson's store alone last year...." ² In closing, the letter stated:

With the UAW on the ballot, we have the opportunity to choose to balance the power between [Hudson headquarters] and us.

By our joining the UAW, we guarantee ourselves a voice in our future. On May 11 vote to give yourself a meaningful voice in decisions that impact your life--VOTE YES FOR THE UAW.

The letter purported to be authored by "Your Fellow Workers/The Westland Employees Organizing Committee," but the UAW concedes that it was actually prepared by a paid UAW representative.

In December 1990, the NLRB overruled Hudson's objections, holding that the letter did not warrant a new election under the standard set forth in Midland National Life Insurance Co., 263 N.L.R.B. 127, 1982 WL 23832 (1982). ³ Accordingly, the Board certified the UAW as the exclusive representative of the Westland bargaining unit. Hudson, nevertheless, refused to negotiate with the UAW based on the company's belief that the union's certification was inappropriate. As a result of this recalcitrance, the UAW filed an unfair labor practice charge against Hudson.

On May 15, 1991, the NLRB ordered Hudson to bargain with the UAW. Two weeks later, Hudson moved to reopen the record on allegations of newly discovered evidence that forged authorization cards were used prior to the election to generate additional support for the union. ⁴ The NLRB denied Hudson's motion, holding that the allegations, even if true, were insufficient to warrant a new election under Midland National Life, because Hudson had not claimed that the cards were actually shown to any employees.

In October 1991, Hudson petitioned this court for review of the Board's refusal to reopen the record. In Dayton Hudson Department Store v. NLRB, 987 F.2d 359 (6th Cir.1993), we remanded the case to the NLRB with instructions to reopen the record and conduct a "full inquiry into such questions as how many authorization cards were forged, the actual use to which those cards were put, when these incidents occurred, and whether and in what context any misrepresentations concerning the cards occurred." Id. at 367. This court also instructed the NLRB to re-evaluate the May 8, 1990 letter under the standard posited in Van Dorn Plastic Machinery Co. v. NLRB, 736 F.2d 343 (6th Cir.1984), cert. denied, 469 U.S. 1208, 105 S.Ct. 1173, 84 L.Ed.2d 323 (1985). ⁵

A hearing pursuant to remand was held before Administrative Law Judge Ladwig from January 18 to 21, 1994. At this hearing, Hudson attempted to establish its forged cards allegations chiefly through the testimony of John Madgwick, cochairman of the Westland Employees Organization Committee. ⁶ Madgwick testified that the organization committee had been told that the UAW would not file an election petition until sixty-five percent of the bargaining unit had signed authorization cards. Madgwick further testified that, after an initial period of high interest, card signing slowed down. Fearing that the sixty-five percent mark would not be reached, Madgwick allegedly decided to attempt to revitalize the union's campaign by forging authorization cards. Madgwick testified that the main impetus for this plan was a telephone call from the organization committee's other cochairman, Mary Grab, in which Grab stated that she was going to forge cards to help reach the goal. ⁷

Madgwick allegedly forged between ten and twenty cards and gave them to union representative Ray Westfall in a mall restaurant frequented by Hudson employees. According to Madgwick, the plan was to make show of handing the cards to Westfall in order to indicate additional union support in hopes of inducing undecided employees who might be present to "jump on the bandwagon." Madgwick testified that approximately fifty employees signed cards as a result of his activities, and he indicated that union representatives were fully aware that he had forged authorization cards.

At the conclusion of the hearing, ALJ Ladwig reaffirmed the NLRB's order to bargain. ALJ Ladwig found Hudson's forgery allegations to be a "total fabrication" and concluded that the May 8, 1990 letter had not affected the outcome of the election. The NLRB subsequently affirmed Ladwig's findings of fact and conclusions of law. This petition ensued, ⁸ raising the following issues: 1) whether the NLRB erred in holding that the May 8, 1990 letter did not meet the Van Dorn standard for a new election; and 2) whether the NLRB's ruling on the unauthorized cards issue should be overturned due to circumstances surrounding the remand hearing and certain errors made therein by ALJ Ladwig.

I. STANDARD OF REVIEW

We do not " 'lightly set aside the results of a NLRB-supervised representation election.' " NLRB v. Superior Coatings, Inc., 839 F.2d 1178, 1180 (6th Cir.1988) (quoting NLRB v. First Union Management, Inc., 777 F.2d 330, 336 (6th Cir.1985)). A party seeking to overturn the results of a representation election " 'has the burden to show that the election was not fairly conducted.' " Dayton Hudson Dep't Store v. NLRB, 987 F.2d at 363 (quoting NLRB v. Bostik Div., 517 F.2d 971, 975 (6th Cir.1975)). If the Board's findings are supported by substantial evidence, they will be upheld. Id.

II. THE MAY 8, 1990 LETTER

The National Labor Relations Act contemplates "unhampered freedom of choice" in selecting a bargaining representative. International Ass'n of Machinists, Tool & Die Makers Lodge No. 35 v. NLRB, 311 U.S. 72, 80, 61 S.Ct. 83, 88, 85 L.Ed. 50 (1940). In attempting to safeguard employees' freedom of choice in the context of campaign statements, the NLRB has stated that it will not set aside an election on the basis of misleading representations alone. Midland National Life Ins. Co., 263 N.L.R.B. at 133. The Board will, however, intervene in "cases where a party has used forged documents which render the voters unable to recognize propaganda for what it is." Id.

Although this court has followed Midland National Life, it has expressed a reluctance to do so in every case. See Van Dorn Plastic Mach. Co., 736 F.2d at 348. In Van Dorn, we held that "[t]here may be cases where no forgery can be proved, but where the misrepresentation is so pervasive and the deception so artful that employees will be unable to separate truth from untruth and where their right to a free and fair choice will be affected." Id. ⁹ On remand, ALJ Ladwig and the NLRB concluded that the May 8, 1990 letter was not sufficient to warrant a new election under the Van Dorn standard. Hudson argues that this conclusion was erroneous.

Hudson maintains that the letter, issued only a few days before the election, impermissibly tainted its outcome. Hudson points out that the UAW's letter was not only untrue, but also deceptive in that it appeared to have been authored by "fellow workers." Hudson argues that this "deception" increased the persuasive force of the misrepresentation to such an extent as to negate voters' freedom of choice on the issue of whether or not to join the UAW.

ALJ Ladwig and the NLRB found no merit in Hudson's position, holding that, although the misrepresentation was gross, it was not sufficiently pervasive or artfully made as to warrant a new election. ¹⁰ ALJ Ladwig reached this conclusion because no evidence was offered which showed: 1) that the contents of the letter did not mirror the sentiments espoused by the committee while campaigning on behalf of the union; 2) that employees were misled into believing that the pro-union statements in the letter were not obviously campaign propaganda; or 3) that the employees would have any reason to believe that the organization committee members would have any special knowledge of company profits. Ladwig also noted that "among all the campaign propaganda, this was [only]...