Equitable Gas Co., Div. of Equitable Resources, Inc. v. N.L.R.B.

• Decision Date: 02 June 1992
• Docket Number: Nos. 91-2638,91-2663,s. 91-2638
• Citation: 966 F.2d 861
• Parties: 140 L.R.R.M. (BNA) 2521, 121 Lab.Cas. P 10,197 EQUITABLE GAS COMPANY, an operating DIVISION OF EQUITABLE RESOURCES, INC., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent. EQUITABLE GAS COMPANY, an operating DIVISION OF EQUITABLE RESOURCES, INC., Respondent, v. NATIONAL LABOR RELATIONS BOARD, Petitioner.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 861

966 F.2d 861

140 L.R.R.M. (BNA) 2521, 121 Lab.Cas. P 10,197

EQUITABLE GAS COMPANY, an operating DIVISION OF EQUITABLE

RESOURCES, INC., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.

EQUITABLE GAS COMPANY, an operating DIVISION OF EQUITABLE

RESOURCES, INC., Respondent, v. NATIONAL LABOR RELATIONS BOARD, Petitioner.

Nos. 91-2638, 91-2663.

United States Court of Appeals Fourth Circuit.

Argued March 3, 1992.

Decided June 2, 1992.

Henry Jared Wallace, Jr., Reed, Smith, Shaw & McClay, Pittsburgh, Pa., argued (Lauren Klett Kroeger, on brief), for petitioner.

Margaret Gaines Bezou, N.L.R.B., Washington, D.C., argued (Jerry M. Hunter, Gen. Counsel, D. Randall Frye, Acting Deputy Gen. Counsel, Aileen A. Armstrong, Deputy Associate Gen. Counsel, Howard E. Perlstein, Supervisory Atty., on brief), for respondent.

Before ERVIN, Chief Judge, PHILLIPS, Circuit Judge, and RAMSEY, Senior United States District Judge for the District of Maryland, sitting by designation.

OPINION

PHILLIPS, Circuit Judge:

Equitable Gas Company (Equitable) petitions for review of a decision by the National Labor Relations Board (Board) that Equitable had violated § 8(a)(1), § 8(a)(3), and § 8(a)(5) of the National Labor Relations Act (the Act), 29 U.S.C. § 158, by unilaterally adopting appearance guidelines and discharging employee James McHale under the guidelines' disciplinary provisions. The Board crosspetitions for enforcement of its resulting order. We affirm in part, vacate in part, and modify in part the Board's decision and order. We grant enforcement of the order as modified.

I.

Equitable is a public natural gas company with 900 employees represented by six unions. International Brotherhood of Electrical Workers, Local Union No. 1956 (Union), represents clerical workers at Equitable's Pittsburgh, Pennsylvania headquarters.

McHale is a Credit Fieldman in Equitable's Customer Services Department. He is a uniformed employee who makes field investigations of customer accounts. McHale has been employed by Equitable for 29 years, and for most of that time, he has worn a long beard and shoulder-length hair. McHale was President of the Union from 1978 until 1987. During the years preceding this action, McHale participated in handling numerous Union grievances at arbitration.

McHale was involved in two relevant conflicts with Equitable management. In June of 1988, McHale presented the Union's position at a hearing on a unit clarification petition. The Union alleged that Equitable had established a separate company as a means of diverting unit jobs to a nonunion operation, and the Union argued that the description of its bargaining unit should be clarified to include those jobs.

In July of 1988, Equitable convened a meeting of management and Union officials which McHale attended. At this meeting Equitable's Manager of Labor Relations, Willard Hardaman, criticized the Union for opposing many of Equitable's actions, including some activities which McHale openly had challenged. Hardaman referred to Equitable as "bunnies", accused the Union of taking "pot shots" at Equitable, and said that Equitable would soon "arm the bunnies and the bunnies would start to shoot back." Hardaman said that unless the Union cooperated, Equitable would increase automation and the use of outside contractors. At that meeting, Equitable President John Milantoni said to McHale, "I see you haven't shaved your beard off yet." McHale responded, "[N]o, I haven't and I have no intentions to." Milantoni responded, "Good."

From 1985 to 1987 Equitable received negative media coverage and severe criticism from the Pennsylvania Public Utility Commission (PUC). PUC levied fines on Equitable for poor customer service. In response, Equitable management instituted a broad program to improve its public image. Equitable remodeled the first floor of its headquarters to accommodate customer services employees who formerly occupied the third floor and began considering employee appearance guidelines.

A 1987 Equitable memorandum said the Union would probably challenge an appearance code as "a unilaterally imposed change in 'working conditions' and/or as an unwarranted extension of management's rights." Equitable acknowledged that the following language from the memorandum referred to McHale:

Hopefully, our ultimate definition and/or code will be reasonable and address the extremes. As you know, we have one Credit Fieldman who presents a rather unorthodox appearance and who ... will argue that his appearance is an asset....

Equitable asked the Union to appoint an employee committee to discuss the appearance guidelines. Equitable sought the Union's input but refused to bargain. In February 1988, the committee met with management. In June of 1988, Equitable sent the Union the "final draft" of the appearance guidelines, which prohibited "[e]xtreme appearance such as unkempt, bushy facial hair or unconventional hairstyles." The guidelines provided for counseling for the first violation and application of the General Disciplinary Policy for subsequent offenses. The guidelines for customer services employees took effect in July of 1988.

On or about July 4, 1988, McHale's direct supervisor told McHale he had ten days to comply with the guidelines. In the ensuing months, McHale received a verbal warning, a written warning, a one-day suspension, and a 10-day suspension. In August, McHale met with management and agreed to cut his hair and trim his beard, but McHale's supervisor later told management that McHale had not cut enough. On August 16, Equitable suspended McHale for 30 days. On October 31, Equitable discharged him for "refusal and failure to report for work in compliance with ... Appearance Guidelines." Although some other employees were counseled, McHale was the only employee disciplined under the guidelines.

McHale and the Union filed a grievance which went to arbitration. The arbitrator found that Equitable was entitled to unilaterally adopt and enforce appearance guidelines and that there was no evidence that Equitable did so in retaliation for McHale's Union activities. However, finding that McHale's behavior was not serious enough to warrant discharge, the arbitrator ordered Equitable to reinstate McHale without back pay.

McHale and the Union filed Board charges alleging that the implementation of the guidelines violated § 8(a)(1), § 8(a)(3), § 8(a)(4) and § 8(a)(5) of the Act. In December of 1989, an Administrative Law Judge (ALJ) denied Equitable's motion to defer to the arbitrator's award and found that Equitable had violated § 8(a)(1) by threatening to retaliate against employees for engaging in protected behavior. However, the ALJ found that Equitable had not violated § 8(a)(5) by failing to bargain with the Union over the guidelines nor violated §§ 8(a)(1), (a)(3), and (a)(4) by adopting and enforcing the guidelines to retaliate against McHale for his union activities.

On review, the Board affirmed the ALJ's refusal to defer to the arbitrator. It affirmed the ALJ's finding of a violation of § 8(a)(1) for implied threats and the ALJ's finding that Equitable had not violated § 8(a)(4) by retaliating against McHale for giving testimony under the Act, but the Board set aside the ALJ's other findings. The Board found that Equitable had violated §§ 8(a)(1) and (a)(3) by adopting and enforcing the guidelines in a discriminatory manner against McHale and that Equitable had violated §§ 8(a)(1) and (a)(5) by refusing to bargain with the Union over the guidelines. The Board ordered Equitable to rescind the guidelines, bargain with the Union on the new guidelines, halt implied threats to employees, and reinstate McHale with back pay. This petition for review and cross-petition for enforcement followed.

II.

We address in turn the Board's refusal to defer to the arbitrator's award and the following Board findings: (1) its rejection of McHale's claim under § 8(a)(4); (2) the conclusion that Equitable violated §§ 8(a)(1) and (a)(3) by adopting and enforcing the guidelines specifically to retaliate against McHale for his union activities; (3) the finding that Equitable violated § 8(a)(1) by threatening Union officials and employees; and (4) the finding that Equitable violated § 8(a)(5) by unilaterally adopting appearance guidelines without bargaining with employees.

A.

The decision whether to defer in a particular case is a discretionary one which we review only for abuse. N.L.R.B. v. Motor Convoy, Inc., 673 F.2d 734, 735 (4th Cir.1982). But the Board's discretion in this matter is limited by its prior decisions recognizing a national policy in favor of using voluntary arbitration as a critical means of resolving labor disputes. Olin Corp., 268 N.L.R.B. 573, 574 (1984). In Spielberg Mfg. Co., 112 N.L.R.B. 1080 (1955), the Board adopted the general policy of deferring to an arbitration award when the arbitration proceedings appear to have been fair and regular, all parties have agreed to be bound, and the decision is not clearly repugnant to the purposes and policies of the Act. Id. at 1082. Raytheon Co., 140 N.L.R.B. 883 (1963), later emphasized that to warrant deferral, the arbitrator must adequately have considered the unfair labor practice issue presented to the Board. Id. at 884-85. Olin later fleshed out this requirement with the rule that an arbitrator has adequately considered the unfair labor practice if (1) the contractual issue is factually parallel to the unfair labor practice issue, and (2) the arbitrator was presented generally with the facts relevant to resolving the unfair labor practice charge. Id. at 576.

The Board has excepted from the Spielberg/Olin general deferral policy allegations made under § 8(a)(4) of the Act, which prohibits an employer from "discharg[ing] or otherwise discriminat[ing] against an employee because he has filed charges or given testimony under th[e] Act...." 29 U.S.C. § 158(a)(4). To insure protection of the...