International Union, United Auto., Aerospace and Agr. Implement Workers of America, (UAW) v. N.L.R.B., 86-7598

• Decision Date: 16 December 1987
• Docket Number: No. 86-7598,86-7598
• Citation: 834 F.2d 816
• Parties: 127 L.R.R.M. (BNA) 2060, 93 A.L.R.Fed. 321, 56 USLW 2392, 108 Lab.Cas. P 10,265 INTERNATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA, (UAW), Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent, and Kawasaki Motors Manufacturing Corporation, U.S.A., Respondent-Intervenor.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 816

834 F.2d 816

127 L.R.R.M. (BNA) 2060, 93 A.L.R.Fed.

321, 56 USLW 2392,

108 Lab.Cas. P 10,265

INTERNATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA, (UAW), Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent and Kawasaki Motors Manufacturing Corporation, U.S.A. Respondent-Intervenor.

No. 86-7598.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Aug. 4, 1987.

Decided Dec. 16, 1987.

Irving M. Friedman, Katz, Friedman, Schur & Eagle, Chicago, Ill., for petitioner.

Allen R. Ferguson, Jr. and Paul J. Spielberg, N.L.R.B., Washington, D.C., for respondent.

Charles E. Sykes, Bruckner & Sykes, Houston, Tex., for respondent-intervenor.

Application for Enforcement of an Order of the National Labor Relations Board.

Before WIGGINS, KOZINSKI and O'SCANNLAIN, Circuit Judges.

WIGGINS, Circuit Judge:

International Union, United Automobile, Aerospace and Agricultural Workers (UAW) petitions for review of an order of the National Labor Relations Board (Board or NLRB) dismissing an unfair labor practice complaint against Kawasaki Motors Manufacturing Corp., U.S.A. (Kawasaki). The UAW contends that Kawasaki unlawfully threatened to close its plant as part of its antiunion campaign. The Board found the preelection statements were lawful predictions of plant closure grounded on objective economic facts. We find the Board's conclusion supported by substantial evidence and affirm.

I.

Kawasaki manufactures motorcycles and other vehicles at its plant in Lincoln, Nebraska. In 1979, in response to a UAW organizing drive, the Board held a union election at the plant which the union lost. The union filed objections to the election and the NLRB set it aside. The Board found Kawasaki violated section 8(a)(1) of the National Labor Relations Act (NLRA), 29 U.S.C. Sec. 158(a)(1) (1982), in its preelection campaign by explicitly threatening plant closure if the union won. Kawasaki Motors Corp., U.S.A., 257 N.L.R.B. 502 (1981), enforced mem., 691 F.2d 507 (9th Cir.1982), cert. denied, 459 U.S. 1202, 103 S.Ct. 1186, 75 L.Ed.2d 433 (1983).

Before the NLRB's order was enforced, the UAW requested a new election, which was scheduled for October 21, 1982. On October 18 and 19, Kawasaki held a series of one hour meetings on company time with small groups of employees. Each meeting began with plant manager Hanson describing the plant's poor financial health. He reminded the employees about recent layoffs, work hour reductions, overstocked inventory, and losses. He explained that the plant had not shown a profit since it opened in 1975, and had its greatest loss, $9,000,000, in the prior year.

The company president Saeki said he was sent to the plant the year before to correct "some big problems," a "$36,000,000 loss in seven years," and that at that time "we had to make a decision either to change the plant to make it profitable or to close the plant." The company's parent, he explained, refused to subsidize it any further and so more losses would lead to plant closure. He noted the plant's productivity was lower than that of plants in developing countries, but had improved recently. His goal for the year was to break even. He cited slack motorcycle demand as the cause of the plant's recent financial woes, and concluded: "I do not like more new problems. Please understand our serious situation. I think at first we must survive. Survival is the most important thing."

Hanson predicted Kawasaki would find it difficult to operate under a UAW contract with restrictive job classifications because the company needed versatility in moving employees among jobs. He said the plant had until the year's end to break even or close. When employees asked him if Kawasaki would close the plant if the UAW won the election, he replied the question was a "trap" which he could not legally answer.

At the close of each meeting, Kawasaki showed a video depicting strike violence, not all involving the UAW. The video blamed the decline of the U.S. auto industry in part on the UAW's "ridiculous work rules that result in the duplication of effort and added cost." The video decried the UAW's "history of long and violent strikes" which had led to "permanent loss of jobs and permanently closed plants," noted that a third of the union's members were unemployed due to the union's stands, and warned that "it's up to you to decide whether they will continue their pattern of striking and closing plants in spite of reality."

Kawasaki issued a letter on October 19, reiterating that it had "serious" problems, warning that "the one thing we do not need now or at anytime, but especially now, is the UAW," and urging a no vote to put the company on the road to success.

The union called the election off and brought an unfair labor practice complaint. An ALJ found that Kawasaki management told its employees just before an election that its financial condition was bleak, the plant had never shown a profit but must do so by the end of the year or close, its parent company refused to accept more losses, it could not make a profit if it had to deal with the UAW, a UAW contract would deprive it of the versatility it needed to survive, and its very survival depended on the outcome of the election. The ALJ found that the video depicted the UAW as strike-happy and as the cause of plant closures, reinforcing the impression that the plant would close if the UAW won. The ALJ concluded that Kawasaki's campaign was a lightly veiled threat to close the plant if the union won that lacked an objective basis and was therefore a violation of section 8(a)(1) of the NLRA.

The Board accepted the ALJ's findings of fact but disagreed with his conclusion. The Board found that the statements at the meetings were lawful predictions of plant closure based on economic facts, the October 19 letter was lawful persuasion, and the video was protected speech. Kawasaki Motors Mfg. Corp., U.S.A., 280 N.L.R.B. No. 53 (1986). The UAW then petitioned to this court for review. Although the dispute arose in Nebraska, we have jurisdiction over the petition under 29 U.S.C. Sec. 160(f) because the UAW does business in Los Angeles.

II.

We will affirm the Board's conclusion that an unfair labor practice was or was not committed if supported by substantial evidence in the record as a whole. NLRB v. Anchorage Times Pub. Co., 637 F.2d 1359, 1363 (9th Cir.), cert. denied, 454 U.S. 835, 102 S.Ct. 137, 70 L.Ed.2d 115 (1981). When, as here, the Board accepts the ALJ's basic factual and credibility determinations, it may draw inferences and conclusions from them different from the ALJ's. NLRB v. General Tel. Directory Co., 602 F.2d 912, 916 n. 7 (9th Cir.1979). If it does so, however, we engage in a more searching review of the record, Tenorio v. NLRB, 680 F.2d 598, 601 (9th Cir.1982), and the ALJ's findings become part of the record for review to be weighed against the evidence supporting the agency. See Laipenieks v. I & NS, 750 F.2d 1427, 1429-30 (9th Cir.1985).

III.

Section 8(a)(1) of the NLRA makes it an unfair labor practice "to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 7," which entitles employees to choose their own representatives. 29 U.S.C. sections 157, 158(a)(1) (1982). Section 8(c) affirms an employer's First Amendment right to express "any views, arguments, or opinion" without violating section 8(a)(1) as long as that expression contains "no threat of reprisal or force or promise of benefit." 29 U.S.C. section 158(a)(1), (c); see NLRB v. Marine World USA, 611 F.2d 1274, 1276 (9th Cir.1980). In NLRB v. Gissel Packing Co., 395 U.S. 575, 89 S.Ct. 1918, 23 L.Ed.2d 547, reh'g denied 396 U.S. 869, 90 S.Ct. 35, 24 L.Ed.2d 60 (1969), the Supreme Court affirmed an employer's right to freely "communicate to his employees any of his general views about unionism or any of his specific views about a particular union, so long as the communications do not contain a 'threat of reprisal or force or promise of benefit.' " Id. at 618, 89 S.Ct. at 1942 (quoting 29 U.S.C. section 158(c)). We will carefully scrutinize unfair labor practices predicated on speech; the speech is privileged if it contains no threat or promise. Marine World USA, 611 F.2d at 1277.

At the same time, the employer's challenged statement must be evaluated in the context of the totality of the employer's conduct, id., and the employer's right of free expression must be balanced against the right of employees to associate freely for purposes of collective bargaining. Gissel Packing, 395 U.S. at 617, 89 S.Ct. at 1941.

In light of these principles, an employer may express opinions or predictions, reasonably based in fact, about the possible effects of unionization on its company. Id. at 618, 89 S.Ct. at 1942. But such a prediction must be "carefully phrased on the basis of objective fact to convey an employer's belief as to demonstrably probable consequences beyond his control or to convey a management decision already arrived at." Id. A prediction is a coercive threat of retaliation if it implies that the employer may take an action "solely on his own initiative for reasons unrelated to economic necessity and known only to him." Id.

IV.

Kawasaki conveyed to its employees by the lecture and video the message that its economic situation was dire, it needed to become profitable by the end of the year or close, and unionization would deprive it of the versatility it needed to survive. Kawasaki was careful to avoid explicitly saying plant closure would result from unionization. ¹ Nevertheless, we are mindful that employees, because of their economic dependency on their employer, tend to "pick up intended implications" from employer statements "that might be more readily dismissed by a more disinterested ear." Gissel Packing, 395 U.S. at 617, 89 S.Ct. at 1942. Thus as the Board concedes, Kawasaki intimated that due to the company's...