JC Penney Co. v. NLRB

• Decision Date: 29 August 1967
• Docket Number: No. 8874.,8874.
• Citation: 384 F.2d 479
• Parties: J. C. PENNEY CO., Inc., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.
• Court: U.S. Court of Appeals — Tenth Circuit

384 F.2d 479 (1967)

J. C. PENNEY CO., Inc., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.

No. 8874.

United States Court of Appeals Tenth Circuit.

August 29, 1967.

William C. McClearn, Denver, Colo. (Robert L. Morris, Morris B. Hecox, Denver, Colo., Eugene F. Rowan and Martin Zeiger, New York City, with him on brief), for petitioner.

Peter M. Giesey, Washington, D. C. (Arnold Ordman, Dominick L. Manoli, Marcel Mallet-Prevost and Nancy M. Sherman, Washington, D. C., with him on brief), for respondent.

Before MURRAH, Chief Judge, and PICKETT and BREITENSTEIN, Circuit Judges.

MURRAH, Chief Judge.

This matter arises from two separate unfair labor practice charges consolidated for hearing after the Union lost a 9(c) representation election. The Board adopted the trial examiner's findings that the employer had coercively interrogated its employees, threatened economic reprisals and promised benefits for union rejection; that it coercively interrogated employee Miller regarding wage increases; and that it unilaterally granted wage increases to its employees, all in violation of § 8(a) (1), 29 U.S.C. § 158. It was also found that while the employer had not refused to bargain in violation of § 8(a) (5), the admitted wage increases were granted for the purpose of interfering with the employees' representation election. The election was set aside; the employer was ordered to cease and desist from its unlawful 8(a) (1) conduct and was further ordered to bargain with the Union upon demand. The crucial questions presented here are (1) whether substantial record evidence supports the Board's 8(a) (1) findings, and (2) whether the Union represented a majority of the employees prior to the representation election. If the latter be true, then we must decide a third question of whether the Board's finding that the wage increase violated 8(a) (1) will alone sustain a bargaining order in the absence of a finding that the employer unlawfully refused to bargain in violation of 8(a) (5).

The background facts and dates are essential to an understanding of our sequential questions. In November, 1964, the employer, J. C. Penney Co., Inc., placed a new operations and control manager in charge of its Denver warehouse (the only establishment involved here), and personnel changes were immediately instituted, including laying off some of the older employees and hiring new ones. The Warehouse Manager, Cox¹, and the remaining employees became "upset" over these changes and in mid-December Cox and four employees began a union² organization campaign. Cox actively encouraged employees to join the movement, and the Union was successful in obtaining signed authorization cards from all twenty-two persons then employed in the warehouse. Several days later, the Union sent a letter to the employer requesting recognition as bargaining agent of the warehouse employees, suggesting a meeting, and enclosing copies of the signed authorization cards. This letter was received by Cox's superior, Lenehan, Manager of the employer's downtown store, who after notifying company officials, contacted the Union agreeing to communicate later regarding the requested negotiations. About a week later, on December 29, the employer filed a representation petition alleging that the appropriate bargaining unit included the downtown retail store as well as the warehouse. The same day Lenehan sent a telegram to the Union stating that the employer doubted the Union's majority of employees in an appropriate unit and that it refused to recognize the Union until after Board certification. The Union replied on January 6 that it regarded the refusal to bargain as "non-meritorious"; that its demand for bargaining was a continuing one and it stood ready, willing and able to meet; and that it was filing charges against the employer with the Board. Charges were filed alleging refusal to bargain in violation of § 8(a) (5). Thereafter the employer pursued its first course of conduct found by the Board to be in violation of 8(a) (1).

The trial examiner found that during the first week in January one of the employees told Lenehan that Cox had influenced the signing of the Union authorization cards; that with this knowledge and on January 11 Lenehan "permitted" Cox, who now had apparently undergone a "change in heart" about the Union, to speak in the employer's behalf to the employees one at a time in the warehouse lunchroom and instructed him to tell the employees that the employer was not "peeved" at them for signing the Union cards. It was also found that during these private interviews on January 11, Cox encouraged the employees to withdraw from the Union, threatened economic reprisals if they "formed the union" and promised wage increases if they withdrew.

On February 5 Cox himself told Lenehan the part he had taken in the Union movement. The Board was notified; the Union withdrew its 8(a) (5) refusal to bargain charge, and the employer withdrew its representation petition. About a week later, however, the Union secured new authorization cards from thirteen of the twenty-four employees then employed in the warehouse, and on February 17 filed the first unfair labor practice charge involved here alleging that the employer violated 8(a) (1) when it interrogated the employees, promised benefits and threatened loss of benefits conditioned upon rejection of the Union. The same day the Union also filed a petition for an election which was heard on March 18.

Nine days later and prior to the Board's decision on the election petition, the employer granted wage increases to be paid on April 5 to all of the warehouse employees except two newly hired. On April 16 the Board rendered its decision that the warehouse employees constituted an appropriate unit and ordered an election. The Union lost the election by one vote and filed its objections. It thereafter filed the second unfair labor practice charge involved here alleging that the employer interfered with the election in violation of 8(a) (1) by granting the wage increases and that it refused to bargain on and after December 21, 1964, in violation of 8(a) (5). The two unfair labor practice charges were consolidated for hearing pursuant to which the Board issued its disputed findings and order.

In considering our first crucial question, the employer first objects to the Board's finding that Cox's January 11 statements to various employees were in violation of 8(a) (1). It argues that the evidence is ambiguous and fails to establish that the statements were made; that even if the statements were made, the employees would have been skeptical of Cox's sincerity since only a few weeks prior he had been the primary participant in the organization movement; and that if the employees could have believed the alleged statements, they could be taken as nothing more than lawful opinions and views.

The trial examiner credited testimony by various employees to the effect that Cox told them in the January 11 interviews that he "thought they had all done wrong"; that he believed Lenehan was sincere and they ought to withdraw from the Union and give him a chance by going back to the company; that if they did so, they would possibly receive raises and that if they formed the Union they could lose benefits such as discounts and holidays; that employees at another Denver company had formed a union and had lost all of the benefits they had enjoyed; and that Lenehan had stated he was sorry "this had all come about" and Cox was convinced Lenehan would review the wage rates and make adjustments if the employees did not go ahead with the Union movement. The record amply supports these findings, and we will not disturb the examiner's credibility judgment. And see American Sanitary Products Co., etc. v. N. L. R. B., Filed Aug. 7, 1967, 10 Cir., 382 F.2d 53. This means, of course, that the Board's order in that respect must be enforced.

The employer next objects to the Board's finding that Cox's statement to employee Miller at the time the wage increase was granted was in violation of 8(a) (1). The Board found from an affidavit by Miller that when Cox informed him of his wage increase, Cox stated he was sure Miller "saw the light on the Union business and that a Union was not needed" and that this statement alone was a violation of 8(a) (1). The employer's objection to this finding is based upon three contentions: (1) that the statement was not alleged in the charge or amended complaint as an 8(a) (1) violation and could not, therefore, be the basis for a finding by the Board; (2) that the statement itself did not violate 8(a) (1); and (3) that the affidavit containing the statement was legally inadmissible for any purpose whatsoever.

It is conceded that the complaint did not specifically allege that the subject statement constituted a violation of the Act. But, "Courts as well as the National Labor Relations Board have held that a material issue which has been fairly tried by the parties should be decided by the Board regardless of whether it has been specifically pleaded." American Boiler Manufacturer's Association v. N. L. R. B., 8 Cir., 366 F.2d 815, 821, and cases cited there. And, "* * * where evidence is received without objection, the pleadings are to be deemed amended". Id. 821 citing and quoting from Associated Home Builders of Greater East Bay, Inc. v. N.L.R.B., 9 Cir., 352 F.2d 745, 754; and see Rule 15, F.R.Civ.P. But, even so, we do not think this particular issue was ever injected into the lawsuit at the examiner's level.

Miller was called to testify in behalf of Regional Counsel. Considerable difficulty was encountered in obtaining satisfactory answers from him, and he had trouble recalling many things due to his "poor memory". Counsel showed him an affidavit he had signed "to see if it refreshes your memory". Miller read the document and testified that he recalled giving it and that the statements contained therein were...