EMPIRE STATE SUGAR COMPANY v. NLRB

• Decision Date: 23 September 1968
• Docket Number: Docket 31732.,No. 469,469
• Citation: 401 F.2d 559
• Parties: EMPIRE STATE SUGAR COMPANY, Inc., Petitioner, American Federation of Grain Millers, AFL-CIO, and its Local 332, Intervenor, v. NATIONAL LABOR RELATIONS BOARD, Respondent.
• Court: U.S. Court of Appeals — Second Circuit

401 F.2d 559 (1968)

EMPIRE STATE SUGAR COMPANY, Inc., Petitioner American Federation of Grain Millers, AFL-CIO, and its Local 332, Intervenor, v. NATIONAL LABOR RELATIONS BOARD, Respondent.

No. 469, Docket 31732.

United States Court of Appeals Second Circuit.

Argued May 6, 1968.

Decided September 23, 1968.

Jesse Freidin, New York City (Herbert Prashker, Frank Cummings, and Poletti, Freidin, Prashker, Feldman & Gartner, New York City, on the brief), for petitioner.

Thomas P. McMahon, of McMahon & Crotty, Buffalo, N.Y., for intervenor.

Glen M. Bendixsen, Atty., N.L.R.B. (Arnold Ordman, General Counsel, Dominick L. Manoli, Associate General Counsel, Marcel Mallet-Prevost, Asst. General Counsel, and Robert E. Williams, Atty., N.L.R.B., on the brief), for respondent.

Before LUMBARD, Chief Judge, and SMITH and ANDERSON, Circuit Judges.

J. JOSEPH SMITH, Circuit Judge:

This is a petition to review a final order of the National Labor Relations Board, 166 NLRB No. 22, and a cross motion by the Board to enforce. The order was issued upon a finding by the Board that the Empire State Sugar Company (herein the Company) had violated section 8(a) (1) and (2) of the National Labor Relations Act, as amended. (61 Stat. 136, 73 Stat. 519, 29 U.S.C. § 151 et seq.)¹ The Board ordered the Company to cease and desist from giving effect to a collective bargaining agreement between it and the American Federation of Grain Millers, Local 332 (herein the Millers) insofar as it embraces the Company's powerhouse employees, and from recognizing the Millers as exclusive bargaining agent for those employees without Board certification. We deny the petition for review, and enforce the order.

In September 1965 the Company opened a new sugar refining plant in Montezuma, New York. Union organizational activity began shortly thereafter. Afterward, election petitions were filed, covering all the employees in the plant, by the Millers and the Teamsters. The International Union of Operating Engineers, Local 71-71A (herein the Engineers), sought to represent only those employees working in the powerhouse. No union received a majority of either bargaining unit in the election held on November 16, 1965. A new election could not be held for at least a year under § 9(c) (3) of the Act.²

Organizational activity began again early in 1966. On April 26, the Engineers sent a letter to the Company claiming a majority of the powerhouse employees, offering to submit authorization cards as proof, and requesting recognition. The Engineers had at the time signed cards from five of the six powerhouse employees. On May 3 the Company replied that it doubted the Engineers' majority and felt that the question could best be resolved by the Board. About a week later, a similar request by the Millers made with respect to a plantwide unit met with a similar refusal. After a strike threat, the Company agreed with the Millers to an impartial card count. The impartial party, Father Shamon, on checking the Millers' cards against the payroll list, found that all the powerhouse employees had signed authorization cards designating the Millers; the same was true for a majority of the other employees. No check was requested by the Company or made of the Engineers' cards. Recognition of, negotiation with, and a contract with the Millers covering all of Empire's employees soon followed.

On July 7, after learning that Empire had recognized the Millers, the Engineers filed 8 (a) (1), (2) and (5) charges based upon alleged unlawful refusal to bargain with the Engineers following the April 26 recognition demand, and unlawful recognition of the Millers. On July 26 the Engineers dropped the 8(a) (2) charge. On October 3 a second amendment dropped the 8(a) (5) charge and reinstated the 8(a) (2) charge. The same day the Regional Director issued a complaint, charging Empire with unlawful aid and assistance to the Grain Millers in violation of 8(a) (1) and 8(a) (2) of the Act.

The trial examiner found that the Company violated Sec. 8(a) (1) and (2) of the Act by recognizing and entering into the union security contract with the Millers covering a unit which included the powerhouse employees, and recommended an order that the Company desist from enforcing the contract in its coverage of those employees and withdraw recognition of the Millers as bargaining representatives of the powerhouse employees unless and until certified by the Board. The Board adopted the findings and in substance the recommended order.

The principal findings under attack are: (1) that the powerhouse employees were an appropriate separate bargaining unit, and (2) that the Company was faced with a real question concerning representation when it recognized one of two or more rival unions. Central to the problem on all issues is the fact that the Company's actions took place during the one-year period following the no-union election result, during which period due to Sec. 9(c) (3) the election procedure was unavailable for the resolution of representation disputes.

(1) The finding that the powerhouse employees are an appropriate separate bargaining unit is supported by substantial evidence on the record as a whole and must be upheld. The powerhouse employees are physically isolated to some extent from the rest of the plant. The powerhouse is treated as a separate department. Its employees are required to be experienced in operation and maintenance of high pressure boilers and turbogenerating equipment, and receive the highest wage rate of plant employees. This is not to say that they have nothing in common with the other employees, for in the off seasons they may be utilized on other maintenance work in the plant, and the entire plant operation is to a large degree integrated. Thus a contrary determination might have been sustainable. But the Board has very wide discretion under Sec. 9(b) in regard to unit determination, and we will not reverse its finding in the absence of an "arbitrary or capricious exercise of administrative discretion," not present here. NLRB v. National Broadcasting Co., 150 F.2d 895, 898 (2 Cir. 1945).

(2) The Board's condemnation of the Company's recognition of and contract with the Millers is based on a finding that the Company's action came at a time when there was a real question of representation of the powerhouse employees based on the conflicting claims of the Millers and the Engineers. This, the Board held, was contrary to the rule of Midwest Piping and Supply Co., 63 NLRB 1060, recognized by this and other courts (see NLRB v. National Container Corp., 211 F.2d 525, 536 (2 Cir. 1954)) requiring that a union's right to be recognized first be determined under the election procedures provided in the Act rather than by an employer's wrongfully usurping the employees' right of choice under the Act.

The underlying finding that there was a real question of representation is clearly supported by substantial evidence in the record, and must stand. Universal Camera Corp. v. NLRB, 340 U.S. 474, 71 S.Ct. 456, 95 L.Ed. 456 (1951). The Company knew that there had been organizing efforts by the Engineers, and had been informed that five of the six powerhouse employees had signed Engineers' cards by April 24, 1966. The Company did not place its refusal to...