L'Eggs Products, Inc. v. N.L.R.B.

• Decision Date: 30 May 1980
• Docket Number: No. 78-2387,78-2387
• Citation: 619 F.2d 1337
• Parties: 104 L.R.R.M. (BNA) 2674, 89 Lab.Cas. P 12,096 L'EGGS PRODUCTS, INCORPORATED, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1337

619 F.2d 1337

104 L.R.R.M. (BNA) 2674, 89 Lab.Cas. P 12,096

L'EGGS PRODUCTS, INCORPORATED, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.

No. 78-2387.

United States Court of Appeals, Ninth Circuit.

May 30, 1980.

Stanley E. Tobin, Hill, Farrer & Burrill, Kyle D. Brown, Los Angeles, Cal., for petitioner.

David A. Fleischer, N. L. R. B., Washington, D. C., for the N. L. R. B.

Petition to Review a Decision of the National Labor Relations Board.

Before DUNIWAY and CHOY, Circuit Judges, and PALMIERI, ^* District Judge.

DUNIWAY, Circuit Judge:

L'Eggs Products, Incorporated petitions for review of an order of the National Labor Relations Board, and the Board cross-petitions for enforcement of its order. The Board adopted the findings, conclusions and proposed order of its Administrative Law Judge. The decision is reported at 236 N.L.R.B. 354 (1978). We set aside the order in part, affirm it in part, and remand to the Board for further proceedings. We also deny, but refer to the Board on remand, L'Eggs' motion for leave to adduce additional evidence before this court.

I. Background Facts.

L'Eggs is a manufacturer and distributor of women's hosiery. Its products are distinctively packaged and are displayed in such stores as supermarkets and superdrugstores in unique racks which it calls "boutiques." The packaging, the racks, and advertising sell the product. The business of monitoring and replacing stock in the racks and keeping them neat and clean, so that they will attract customers, is conducted by route sales representatives (RSRs) employed by L'Eggs. They are provided with vans and uniforms, and work under the supervision of Area Managers.

The case concerns L'Eggs' sales district covering southern California and part of Nevada, with headquarters in Buena Park, California. At the time in question, there were 40 RSRs in the district, and on January 19, 1976, Retail Clerks Union Local 770 sent to L'Eggs' Western regional manager, Schwaegler, by certified mail, a letter signed by 13 of these RSRs stating that they were "actively engaged in an organizing program to obtain a union contract." The letter concluded "We would caution you to refrain from any interference or restraint of your employees' right to self-organization." It was received by Schwaegler on January 21.

The reaction of L'Eggs was immediate and effective, and resulted in charges filed with the Board that gave rise to this proceeding. The Company's position was stated by its Senior Vice President, Sales and Distribution, Engle, the self-described creator of the business, at a dinner meeting of all the RSRs in the district on February 5, 1976: "It is . . . our intention to oppose this Union and by every lawful and proper means to prevent it from coming into this operation." One question presented is whether the Company went beyond this expressed intention and committed unfair labor practices.

We will state additional facts as we consider each of L'Eggs' principal arguments.

II. The Discharges.

Five employees were discharged, one, RSR LuAnn Morgan, on November 20 1975, one, RSR Jackie Wade Smith, on January 26, 1976, and three others, not RSRs, on January 27, 1976. As to one of the three, the general counsel dropped the charge; as to the other two, the AL Judge found the discharges lawful. The Board has accepted the AL Judge's decision as to these three employees. It also accepted the decision that L'Eggs discharged Morgan and Smith because of their union activities.

A. The Standard for Decision.

We cannot overturn the Board's decision if it is supported by substantial evidence on the record considered as a whole. 29 U.S.C. § 160(e); Universal Camera Corp. v. NLRB, 1951, 340 U.S. 474, 487-488, 71 S.Ct. 456, 463-464, 95 L.Ed. 456. Nor can we reject the Board's choice between fairly conflicting views even though we would have made a different choice had the matter been before us originally. Id. See, also, NLRB v. Walton Mfg. Co., 1962, 369 U.S. 404, 405, 82 S.Ct. 853, 854, 7 L.Ed.2d 829.

Section 8(a)(3) of the National Labor Relations Act, 29 U.S.C. § 158(a)(3), makes it an unfair labor practice for an employer "by discrimination in regard to . . . tenure of employment to . . . discourage membership in any labor organization." Firing an employee for supporting a union violates this provision.

An employer may discharge an employee for good cause, bad cause, or no cause at all, without violating § 8(a)(3), as long as his motivation is not antiunion discrimination and the discharge does not punish activities protected by the Act, NLRB v. Ayer Lar Sanitarium, 9 Cir., 1970, 436 F.2d 45, 49. It follows that the Board has the burden of proving that a discharge was motivated by antiunion animus. NLRB v. Klaue, 9 Cir., 1975, 523 F.2d 410, 413. A business reason for a discharge cannot be used as a pretext. Ayer Lar Sanitarium, supra, 436 F.2d at 50. A discharge for which the employer has a justifiable ground violates § 8(a)(3) if it is in fact motivated by antiunion sentiment. NLRB v. Western Clinical Laboratory, Inc., 9 Cir., 1978, 571 F.2d 457, 459. Proof that the employer knew about the employee's union activities is a prerequisite to a finding that a discharge violates § 8(a)(3). Brooks v. NLRB, 9 Cir., 1976, 538 F.2d 260, 261; NLRB v. Klaue, supra, 523 F.2d at 413.

In this circuit, the test for determining whether a discharge violates § 8(a) (3) has changed over the last several years. In NLRB v. Ayer Lar Sanitarium, supra, 436 F.2d at 50, we said that the "test is whether the business reason or the . . . union activity is the moving cause behind the discharge. . . . In other words, would this employee have been discharged but for his or her union activity?" (emphasis in original). In NLRB v. Central Press of California, 9 Cir., 1975, 527 F.2d 1156, 1158, we upheld the Board's finding of a violation because it found that a discharge was at least partially motivated by the union sympathy of the employee, (citing similar language in NLRB v. Ayer Lar Sanitarium, supra.) In Western Exterminator Co. v. NLRB, 9 Cir., 1977, 565 F.2d 1114, 1118, however, we said that where a discharge is motivated by both a legitimate business consideration and protected union activity, the test is which "is the moving cause behind the discharge" (emphasis added). We also said, "(w)here a party has two motives, one permissible and the other impermissible, the better rule is . . . that the improper motive must be shown to have been the dominant one." (emphasis added) Accord: Hambre Hombre Enterprises, Inc. v. NLRB, 9 Cir., 1978, 581 F.2d 204, 207 n.4; Stephenson v. NLRB, 9 Cir., 1980, 614 F.2d 1210, 1213; NLRB v. BigHorn Beverage, 9 Cir., 1980, 614 F.2d 1238, 1242; NLRB v. Best Products, Inc., 9 Cir., 1980, 618 F.2d 70, (1980); Stephens Institute v. NLRB, 620 F.2d 720 (9 Cir.1980).

There is one recent decision that appears to adopt a less stringent test in discharge cases, NLRB v. Lantz, 9 Cir., 1979, 607 F.2d 290, 299. Lantz distinguishes Western Exterminator Co. as involving "an isolated discharge of a single employee, where the action of the employer was not 'inherently destructive' of § 7 rights." The opinion then cites Portland Willamette Co. v. NLRB, 9 Cir., 1976, 534 F.2d 1331, as listing "examples of inherently destructive activity which included 'permanent discharge for participation in union activities,' " and concluded that inherently destructive activity was involved in Lantz, so that Western Exterminator Co. does not apply. In Lantz we defined the test as that the discharge be "at least partially" for union activity, but that that motivation need not be dominant. We do not understand the distinction made in Lantz because the discharge in Western Exterminator was just as "permanent" as in Lantz. Our latest decisions, cited supra, follow Western Exterminator Co. and do not cite Lantz. We conclude that Lantz should be confined to its facts discharges for seeking to enforce the contract between the employer and the union. That is not involved here. Therefore, in considering the two discharges here involved, we apply the Western Exterminator Co. test.

B. The Discharge of Morgan.

The AL Judge found that Morgan was discharged because of her support of unionism, and the Board adopted his position. L'Eggs mounts a vigorous attack on this decision. ¹ Its strongest points are two. One is that the discharge occurred on November 20, 1975, well before there was any organized effort in behalf of the union. The other is that Morgan's work performance was poor, and would justify her discharge.

On the other hand, the discharge occurred very soon after L'Eggs received reports that Morgan was interested in unions and would support a union for RSRs at L'Eggs. In the first half of November, 1975, RSRs Morgan, Quigley and Michaels and warehouseman Dennis Potter were at the balance point ² in San Diego. Morgan asked Potter about unions, because her boyfriend was considering a job where there was a union. Nothing was said about a union at L'Eggs. Nevertheless, not long after, Potter received a telephone call from Area Manager Hetherington, Morgan's supervisor, who said that an RSR had told him that Potter had been talking to the RSRs about the union. He asked Potter whether RSRs were trying to organize San Diego and what Morgan had said. Potter said that he did not think that anything was going on, and that one RSR had merely inquired on behalf of her boyfriend.

Morgan had been assigned to a training seminar because her performance rating for October was unsatisfactory. During lunch with other RSRs on Friday, November 14, 1975, Morgan, who was the only San Diego RSR at the seminar, said that RSRs' pay and benefits were inadequate and working conditions poor and suggested that they consider unionization. Another RSR, Arlene Hungate, stated loudly that she would not join a union. That evening, Hungate phoned her Area Manager, Deanna Manning, and said...