General Motors Acceptance Corporation v. NLRB, 72-1128.

• Decision Date: 06 April 1973
• Docket Number: No. 72-1128.,72-1128.
• Citation: 476 F.2d 850
• Parties: GENERAL MOTORS ACCEPTANCE CORPORATION, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.
• Court: U.S. Court of Appeals — First Circuit

476 F.2d 850 (1973)

GENERAL MOTORS ACCEPTANCE CORPORATION, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.

No. 72-1128.

United States Court of Appeals, First Circuit.

Heard February 6, 1973.

Decided April 6, 1973.

Edmond J. Dilworth, Jr., Detroit, Mich., with whom Ross L. Malone, Harry S. Benjamin, Jr., Eugene L. Hartwig, J. R. Wheatley, and Robert N. Price, Detroit, Mich., were on brief, for petitioner.

Stanley J. Brown, Atty., Washington, D. C., with whom Peter G. Nash, Gen. Counsel, Patrick Hardin, Associate Gen. Counsel, Marcel Mallet-Prevost, Asst. Gen. Counsel, and Abigail Cooley Baskir, Atty., Washington, D. C., were on brief, for respondent.

Before COFFIN, Chief Judge, McENTEE and CAMPBELL, Circuit Judges.

McENTEE, Circuit Judge.

In this proceeding General Motors Acceptance Corporation (GMAC or the company) seeks review of a Labor Board order¹ holding that it violated § 8(a)(1) and (5) of the National Labor Relations Act. 29 U.S.C. § 158 (1970). Specifically, GMAC challenges Board findings that it coerced its employees in the exercise of their § 7 rights by suspending payment of merit increases and by soliciting signatures on letters repudiating the union;² also that it violated § 8(a)(5) by failing to bargain in good faith. The Board cross-petitions for the enforcement of its order. For the reasons set forth below, we grant the petition for enforcement.

The salient background facts are as follows. In early 1968 GMAC, a wholly owned subsidiary of General Motors Corporation which was engaged in the financing of motor vehicles, had in effect a program of semiannual merit reviews covering the performance of its field representatives³ in its San Juan, Puerto Rico office. The representatives whose work was rated "fair" or higher were usually given salary increases as a result of this review. In September 1968, when the union first made its presence known, the company discontinued this policy and informed the field representatives that no further raises would be given until the status of the union was settled. On November 21, 1968, following a consent election, the union was certified as the bargaining agent for the representatives.

Negotiations between the union and GMAC began on December 12, 1968, and continued at a leisurely pace for the next seventeen months. Although the union was in part responsible for the slow-paced nature of the bargaining, the company's selection of a team of negotiators based on the mainland and able to visit Puerto Rico only for very brief periods each month appears to have been a major source of delay. Also, throughout this period, while the company continued to conduct the semiannual employee evaluations and was forced by competitive conditions to pay higher salaries to newly hired employees, it persisted in withholding all merit increases. The upshot of this policy was that by December 1969 a number of experienced representatives were receiving salaries lower than those being paid to newly hired, inexperienced employees. As an outgrowth of this situation, the company began to receive a number of complaints about its freeze on merit increases. When the company insisted that its hands were tied until negotiations with the union were settled, employee dissatisfaction with the union soon became widespread.⁴

In the meantime, negotiations continued to proceed at a sluggish pace.⁵ Following a single half day meeting in December 1969, the parties met for two half days in both March and April. On May 4, 1970, a company official sent a letter to all employees which purported to summarize the status of the negotiations. This letter read in part as follows:

"To summarize, I would say the present status of the negotiation is unclear. It does appear, however, that with the many items still remaining and judging from the pace of past bargaining and the results thereof, an early resolution is highly speculative.

"In conclusion, I would like to make one more point. I have been told that the Field Representatives feel that without the Union to protect them, they would be discharged from their employment. This is completely false. Our objective is to manage fairly and with justice to all employees."

At the May 15 bargaining session the union abandoned all of its proposals and acceded to the company's position on all issues except retroactivity. GMAC's bargaining team then announced that they were returning to the mainland to study the union's offer and to await union notification as to whether it found their retroactivity proposal satisfactory. Five days later, in spite of intense pressure from the employees to conclude the negotiations, the union informed the company that it was maintaining its position on this issue. The parties then agreed to meet again in Puerto Rico on June 10.

During the first week of June, at the direction of the GMAC bargaining team, company officials in San Juan solicited and obtained the signatures of six field representatives, all of whom had previously expressed dissatisfaction with the union, on letters prepared by the company which stated that they "voluntarily disavowed" the union as their collective bargaining agent. At the June 10 meeting the company, relying on these letters and the numerous oral expressions of employee discontent it had received, withdrew recognition from the union expressing doubt as to its majority status. Thereupon the union filed the instant unfair labor practice charges. In October 1970, the company granted substantial non-retroactive merit increases to all of the field representatives which it conceded were "catch-up" raises for those which had been withheld for the previous two years.

Based on this background a majority of the Board concluded that by "denying merit increases to its employees after awarding them satisfactory work performance ratings, implying that they should abandon the Union to obtain withheld merit increases, assisting its employees in the preparation of necessary papers for disaffiliation from the Union, delaying bargaining, and breaking off negotiations," GMAC had, in effect, engaged in a systematic campaign designed to undermine employee support for the union. The company raises objections to each of these unfair labor practice findings.

Turning first to the pivotal issue of the suspension of merit increases, the company contends initially that the Board was barred by § 10(b) of the Act, 29 U.S.C. § 160(b) (1970), from finding this conduct unlawful because the original decision to stop paying these raises was made more than six months before the complaint in this action was filed.⁶ The Board's rejoinder, which we find persuasive, is that its finding on this charge is based not upon GMAC's initial decision to take this action but rather upon a number of acts committed within the limitations period which, when viewed in the aggregate, indicate that GMAC was attempting to discredit the union by shifting full responsibility to it for the employees' loss of the merit increases. For example, in May 1970 the company conducted a merit evaluation and informed individual employees how their work had been rated. When a number of representatives complained about not receiving increases following this evaluation, the company was quick to point out that no raises could be had until the negotiations were settled. The company's letter of May 4 to all of the employees served only to exacerbate the situation. By characterizing the present status of the negotiations as "unclear" and the chances of an early settlement as "highly speculative," the company further fanned the embers of employee discontent. The solicitation of the letters repudiating the union was the final step in this campaign. Given these events, all of which occurred within the limitations period and which, when considered in concert, are sufficient to make out the alleged violation, it is clear that this charge was not time barred.⁷

GMAC's second line of defense, namely that it was required to suspend merit increases throughout the period of the negotiations under the mandate of NLRB v. Katz, 369 U.S. 736, 82 S.Ct. 1107, 8 L.Ed.2d 230 (1962), is also without merit. In Katz the Supreme Court drew a distinction between merit increases which "were in line with the company's long-standing practice of granting quarterly or semi-annual merit reviews—in effect, were a mere continuation of the status quo" and those which were not. Id. at 746, 82 S.Ct. at 1113. Finding that the raises in question were of the latter variety, the Court held that Katz had violated § 8(a)(5) and (1) by unilaterally granting such increases while bargaining over similar raises with the union. In the instant case, however, the Board found that GMAC's merit increase program fell within the former category. While recognizing that the company retained some discretion over whether increases would be granted to individual employees, depending upon the outcome of each...