DIVISION 1142, ETC. v. NLRB, 16007.

• Decision Date: 06 July 1961
• Docket Number: No. 16007.,16007.
• Citation: 294 F.2d 264
• Parties: DIVISION 1142, AMALGAMATED ASSOCIATION OF STREET ELECTRIC RAILWAY AND MOTOR COACH EMPLOYEES OF AMERICA, AFL-CIO, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.
• Court: U.S. Court of Appeals — District of Columbia Circuit

294 F.2d 264 (1961)

DIVISION 1142, AMALGAMATED ASSOCIATION OF STREET ELECTRIC RAILWAY AND MOTOR COACH EMPLOYEES OF AMERICA, AFL-CIO, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.

No. 16007.

United States Court of Appeals District of Columbia Circuit.

Argued May 15, 1961.

Decided July 6, 1961.

Petition for Rehearing Denied September 12, 1961.

Mr. George Schatzki, Dallas, Tex., of the bar of the Supreme Court of Texas, pro hac vice, by special leave of court, and Mr. L. N. D. Wells, Jr., Dallas, Tex., with whom Mr. Bernard Cushman, Washington, D. C., was on the brief, for petitioner.

Mrs. Nancy M. Sherman, Atty., N. L. R. B., with whom Messrs. Stuart Rothman, Gen. Counsel, N. L. R. B., Dominick L. Manoli, Associate Gen. Counsel, N. L. R. B., Marcel Mallet-Prevost, Asst. Gen. Counsel, N. L. R. B., and Miss Rosanna A. Blake, Atty., N. L. R. B., were on the brief, for respondent.

Before WASHINGTON, DANAHER and BASTIAN, Circuit Judges.

Petition for Rehearing En Banc Denied En Banc September 12, 1961.

BASTIAN, Circuit Judge.

Petitioner Union seeks review of a decision and order of respondent Board dismissing in its entirety a complaint based on charges that Continental Bus System, Inc. Continental had engaged in unfair labor practices by refusing to bargain in good faith, as required by § 8(a) (5) and (1) of the Labor Management Relations Act of 1947,¹ and had engaged in surveillance of union representatives, in violation of § 8(a) (1) of the Act. Petitioner further contends:

"The Board erred in failing to note, or consider, the union\'s exceptions to the Examiner\'s Report, and in failing to state sufficiently, or to support with reasons, its rulings on material exceptions to the decision of its Examiner, all in contravention of the requirements of Section 8(b) of the Administrative Procedure Act 5 U.S.C.A. § 1007(b), and the Board\'s own Rules and Regulations."

I. Refusal to Bargain

The Union had represented employees of Continental since approximately 1937; and, until 1958, the Company and the Union had enjoyed an unbroken record of harmonious and successful bargaining. There had never been a strike, and the Company had always advised the Union of its financial status.

In April 1958, the parties met to negotiate a new contract to replace the one due to expire on May 15, 1958. At that meeting, the Union submitted a proposal calling for general wage increases and a disability and retirement plan. A few days later, when the negotiators again met, Company representatives informed the Union that Continental was then operating at a loss and, because of its poor financial condition, would be unable to grant any Union proposal entailing increased cost. The Company pointed out that every bit of income was needed to meet existing commitments. It sought to renew the contracts, indicating that with the tourist season then approaching there might be a later opportunity to meet at least in part, from the expected increase in revenue, some of the Union's demands. The Union rejected the Company's proposal that the existing contracts be extended for one year. At later meetings held immediately before expiration of the contracts, the Company proposed that they be extended for sixty days but the Union agreed only to a day-to-day extension.

At the next conference, on June 30, the Company rejected a Union proposal and offered a counter-proposal which offered slight wage increases. The Union claims the counter-proposal was not offered in good faith as it discriminated between classes of employees represented by the Union. When the counter-proposal was submitted, the Company informed the Union that, if a strike were called, the Company's financial condition would worsen and, as a result, it would have progressively less to offer. Certainly, the Company at all times candidly stated its financial position to the Union. A strike commenced on July 2, 1958.

The parties were unable to conclude an agreement and, in October, the Company resumed operations. All Union employees who returned to work at that time were given full seniority rights, and, where necessary, new employees were hired to replace Union members who remained on strike. Subsequent negotiations extending until the beginning of December failed to result in agreement, primarily because of an impasse over the Union's demand that employees who had remained on strike be reinstated with full seniority. The Company's position was that, by then, it had incurred obligations to its new employees and that it was financially unable to satisfy those obligations while, at the same time, giving all returning Union members the seniority they had enjoyed prior to the strike. No agreement was ever reached.

Appellant's arguments on this point tacitly equate refusal to bargain in good faith and refusal to recede from an announced position. In many instances such argument might be persuasive, but that is not the case here. At the start of negotiations, the Company had stated that it was financially unable to pay increased wages. There is no suggestion that the Company's position was not taken in good faith, and the trial examiner found that the general counsel had failed to prove otherwise.

The Board found that the Company had sincerely attempted to reach agreement with the Union, and we think the record before us furnishes substantial evidence to support that conclusion. The Union's extreme demands — increases of 100% in some aspects — the Company's insecure financial position, its long record of cooperation with the Union, the previously good personnel relations, and the Company's continuation, even during the strike, of a voluntary program of retirement were among the factors which were surely entitled to weight. Such evidence discloses a substantial basis for the Board's conclusion that the Company had not been shown to act in bad faith.

II. Surveillance

As the strike progressed, it developed that from time to time there were concentrations of "cars and men, three, four, five, six cars, carloads of striking employees" at or near the Company's premises "generally speaking at night." It is a matter of common knowledge that tempers rise and industrial strife results from incidents which develop under such circumstances. The Company, with several million dollars of property at stake, decided upon protective measures, and for that purpose employed C & I Protection, Inc. to furnish guard service. The C & I concern was controlled by one Smith, who also was in control of a subsidiary known as Truth Verification, Inc., the president of which was one Baker. The Union was engaged in controversy, not only with the Company here, but also with others. After anonymous threats to the safety of members of Baker's family had been received, it developed that Truth undertook to place microphones in various locations to ascertain the source of the threats. The Company here had not employed Truth for any purpose.

There can be no question that had the Company engaged in "bugging" hotel rooms or offices occupied by members of...