DTR Industries, Inc. v. N.L.R.B.

Decision Date03 November 1994
Docket NumberNos. 93-5784,93-5906,s. 93-5784
Citation39 F.3d 106
Parties147 L.R.R.M. (BNA) 2705, 129 Lab.Cas. P 11,216 DTR INDUSTRIES, INC., Petitioner/Cross-Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent/Cross-Petitioner.
CourtU.S. Court of Appeals — Sixth Circuit

James A. Rydzel (argued and briefed), Jones, Day, Reavis & Pogue, Cleveland, OH, for petitioner cross-respondent.

Frederick Calatrello, Director, N.L.R.B., Region 8, Cleveland, OH, Aileen A. Armstrong, Deputy Associate Gen. Counsel, Linda Dreeben (briefed), Robert J. Englehart (argued and briefed), N.L.R.B., Appellate Court Branch, Washington, DC, for respondent cross-petitioner in No. 93-5906.

John C. Truesdale, Executive Secretary, N.L.R.B., Office of the Gen. Counsel, Washington, DC, Frederick Calatrello, Director, Charles Z. Adamson, N.L.R.B., Region 8, Cleveland, OH, Aileen A. Armstrong, Deputy Associate Gen. Counsel, Linda Dreeben (briefed), Robert J. Englehart (argued and briefed), N.L.R.B., Appellate Court Branch, Washington, DC, for respondent cross-petitioner in No. 93-5784.

Before: KENNEDY, RYAN, and NORRIS, Circuit Judges.

RYAN, Circuit Judge.

The petitioner, DTR Industries, Inc., seeks review of an order of the respondent, National Labor Relations Board, vacating the results of an election in which a majority of the petitioner's employees voted against representation by the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, UAW. The petitioner further challenges the Board's findings that the UAW obtained a card majority and that the petitioner repeatedly violated Section 8(a)(1) of the National Labor Relations Act, 29 U.S.C. Sec. 158(a)(1), as well as the Board's bargaining order arising out of these findings. The Board cross-petitions for enforcement of its order.

Assuming, without deciding, that the UAW obtained a card majority, the sole issue for decision is whether substantial evidence supported the Board's issuance of an order to bargain. Because we conclude that the Board failed to demonstrate that a fair election could not now be held, we deny enforcement of the Board's order.


The petitioner manufactures components for sale to automobile manufacturers. From its inception in 1988, the petitioner has built a customer base composed primarily of foreign automakers Honda, Mazda, and Toyota. The petitioner has been the sole source supplier of its products for all of these customers.

In September 1989, the UAW undertook an organizing campaign among the petitioner's approximately 75 production and maintenance employees or "associates." Over the span of a few days, 59 employees signed single-purpose union authorization cards. The cards stated:

This card will be used to secure recognition and collective bargaining for the purpose of negotiating wages, hours, and working conditions.




It is the policy of the UAW to waive initiation fees for ALL employees who join the union before thirty (30) days after the signing of an initial collective bargaining agreement.


By joining the UAW you have the support of the world's largest Industrial Union.

Despite the seeming card majority, the UAW did not use the cards to demand bargaining. Rather, they filed an election petition, and an election was scheduled for November 17, 1989.

Well before the onset of the UAW's organizing activities, according to Board findings, the petitioner had undertaken efforts to develop a competitive wage policy. In June 1989, the petitioner determined that it would implement wage increases in a two-step process, a short-term increase to address immediate employee concerns, followed by a long-term wage policy. On September 1, 1989, still prior to any UAW activity, the petitioner announced a five percent short-term increase. It expected at that time to have its long-term policy ready by October 1989.

After the union filed its representation petition, the petitioner continued to develop its long-term wage policy. After stipulating with the UAW that the petitioner's group leaders were actually supervisors excluded from the proposed bargaining unit, the petitioner increased group leader wages from the $7.50 per hour range to $10 per hour. In response to employee questions, the petitioner explained that it was able to implement the group leaders' salary increase because of their supervisory status. The petitioner further explained that the law forbade it from changing or making promises to change unit members' wages and benefits until after the election. Nevertheless, the petitioner continued to work on the wage policy, and on November 14, reviewed a consultant's proposal that called for an increase to a top wage of $10.25 per hour over 24 months. On November 16, the day before the election, employee Brad Fisher asked human resources director Alan Haynes, whether "if we were to vote no, when would we hear about the wage package?" Haynes reportedly responded, "if we were to vote no in the election, that after the votes were counted ..., they would announce the wage package." No final decision was made on the long-term wage policy prior to the election.

While the election campaign was ongoing, group leaders Joseph Brinkman and Robert Falk commented to some employees that if the UAW prevailed at the election, customers Toyota and Honda were likely to assign at least 50 percent of their business to another contractor. Quality control director Gregory Lewandowski allegedly made a similar statement to employee Martin Clum. In addition, group leader Dorothy Jordan commented to one or more employees that she was looking for work elsewhere, because either her group or the petitioner would close its doors if the petitioner were forced into unionization. Also, according to employee James McClain, Brinkman and Jordan asked him to identify employees who were union adherents, a request which McClain declined.

On November 10, 1989, one week before the election, the petitioner's president, Yuji Kobayashi, distributed a four-page letter to employees, in which he opined that "it would be irresponsible on my part if I did not attempt to summarize for you what I believe are the very critical factors in this election and request that you give them serious consideration before you cast your vote." Kobayashi's letter went on to explain that because the petitioner sole-sourced to its customers, the "business would automatically be reduced if the union wins the election and our customers took away 50 percent of our sole source business." Kobayashi also noted in the letter that U.S. auto companies typically required a unionized supplier to build up a 90-day inventory prior to the expiration of the supplier's collective bargaining agreement. Then, explained Kobayashi, if the supplier negotiated a new collective bargaining agreement without a strike, employee layoffs were required to reduce the built-up inventory. The letter concluded with the following observation:

Having a union will hurt our business and our chances for success. We will lose some or all of our sole source business and create the danger of losing the confidence of our customers. Let us show what DTR and its associates can do together as a team without the union. You have our attention and our commitment. We will listen and we will respond and we will have a mutual commitment to each other.

In addition, during the election campaign, the petitioner installed suggestion boxes and a toll-free telephone number for processing employee comments and questions. According to the petitioner, these measures were necessary to keep lines of communication open with employees, because theretofore, the employees had addressed their concerns to group leaders, who the employees now viewed with distrust because of the upcoming election. The petitioner undertook improvements, based on information received through the suggestion boxes and the toll-free line.

The UAW lost the election by a single vote. The November 17 election fell on a Friday, and on the following Monday, November 20, the petitioner adopted the wage proposal it had reviewed on November 14.

On February 8, 1990, the UAW filed an unfair labor practice charge, accusing the petitioner of refusing to bargain in violation of section 8(a)(5) of the NLRA, 29 U.S.C. Sec. 158(a)(5). Although the UAW had never demanded bargaining, it took the position that the petitioner was duty-bound to bargain by virtue of the 59 authorization cards. On March 23, 1990, the Board's General Counsel issued its complaint and notice of hearing, alleging that the petitioner not only had violated section 8(a)(5), but also had committed numerous violations of section 8(a)(1) by promising and granting wage and benefit increases, by threatening to close the company or lay off employees if the union prevailed, by instituting a new grievance procedure, and by interrogating at least one employee.

Following six days of administrative hearings, the ALJ issued his decision, in which he concluded that the General Counsel had failed to prove the section 8(a)(5) violation. The ALJ based his conclusion on his finding that union agents had misrepresented the purpose of the authorization cards to at least 31 of the 59 employees signing the cards. On this basis, the ALJ rejected the General Counsel's request for a bargaining order. The ALJ did find, however, that the petitioner had violated section 8(a)(1) as alleged. On this basis, the ALJ issued a cease-and-desist order and awarded costs to the General Counsel.

Both the General Counsel and the petitioner filed exceptions to the ALJ's decision. The Board agreed with the General Counsel that the union had not employed misrepresentations to procure the necessary majority of employee signatures, and on this basis, issued the order to bargain that is the subject of these cross-petitions.


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