Montgomery Ward & Co., Inc. v. N.L.R.B., s. 88-2165

• Decision Date: 13 June 1990
• Docket Number: Nos. 88-2165,88-2471,s. 88-2165
• Citation: 904 F.2d 1156
• Parties: 134 L.R.R.M. (BNA) 2537, 59 USLW 2005, 115 Lab.Cas. P 10,165 MONTGOMERY WARD & CO., INCORPORATED, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1156

904 F.2d 1156

134 L.R.R.M. (BNA) 2537, 59 USLW 2005,

115 Lab.Cas. P 10,165

MONTGOMERY WARD & CO., INCORPORATED, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.

Nos. 88-2165, 88-2471.

United States Court of Appeals Seventh Circuit.

Argued Feb. 27, 1990.

Decided June 13, 1990.

Alexandra M. Goddard, Montgomery Ward & Co., Chicago, Ill., Patrick M. Flynn, Watson, Flynn & Bensik, Houston, Tex., for Montgomery Ward & Co.

Aileen A. Armstrong, Appellate Court-Enforcement Litigation, John C. Truesdale, John D. Burgoyne, Appellate Court, Enforcement Litigation, Washington, D.C., Michael M. Dunn, Houston, Tex., Guadalupe Ruiz, San Antonio, Tex., Lois Johnson, James R. Watson, Jr., Bray & Watson, Houston, Tex., Harry R. Poole, Samuel J. Talarico, George R. Murphy, Steven B. Goldstein, Elliott Moore, Susan L. Williams, Appellate Court-Enforcement Litigation, Washington, D.C., Louis V. Baldovin, Jr., Houston, Tex., for National Labor Relations Board.

Before FLAUM, EASTERBROOK and RIPPLE, Circuit Judges.

FLAUM, Circuit Judge.

The issue presented in this appeal is whether the National Labor Relations Board abused its discretion in ordering the imposition of a bargaining order as the appropriate remedy for a string of unfair labor practice violations by the petitioner during a certification election although almost eight years had passed and circumstances had materially changed since the violations occurred. We decline to enforce the Board's imposition of a bargaining order and remand the case for further consideration concerning the appropriateness of traditional remedies in light of substantial changes occurring in the intervening years affecting management and the work force.

I.

This matter is before us on the petition of Montgomery Ward & Co., Inc. (the "Company" or "MW") for review of an order by the Board, and on cross-application of the Board for enforcement of that order. ¹ The underlying facts of this case are uncontested. The Company operates a retail store and warehouse in Pharr, Texas. In January of 1980, union organizational activity began among the employees of the store and warehouse. The United Food and Commercial Worker's International Union, Local Number 455 (the "Union"), responded to inquiries by the employees. Employees who supported the Union solicited signed authorization cards from fellow employees. After the organizational campaign, the Union notified MW by letter that it represented a substantial majority of the employees in the Pharr store. The Union also filed a Petition for Certification of Representation. On June 18, 1980, an election was held and the employees voted 132 to 121 against representation by the Union, with 8 challenged votes.

Beginning on April 1, 1980, the Union filed a series of charges against MW alleging various violations of sections 8(a)(1), (3), (4) and (5) of the National Labor Relations Act, 29 U.S.C. Sec. 151 et seq. (the "Act"). The Regional Director issued a complaint in response to each of the charges. The ALJ issued his opinion on March 10, 1982, almost two full years after the charges were filed. In his thorough and extensive 135 page decision, the ALJ found that the Company engaged in an active campaign to defeat the union organizing drive and in doing so committed a myriad of serious and far-reaching unfair labor practices in flagrant violation of the Act. The ALJ also found that on April 24, 1980, the Union represented a majority of the employees and that by not recognizing the Union, MW violated section 8(a)(5). The most serious violations by the Company included findings that supervisors responded to union activity with surveillance, interrogation, threats of violence and loss of work hours, and discharge of union leaders, unlawful conduct by the highest-ranking officials at the store, and a program of grievance solicitation and wage increases. The ALJ concluded that based on the number and severity of the violations, "the imposition of a bargaining order was warranted...."

On April 26, 1982, both MW and the General Counsel filed exceptions to the ALJ's decision. The case was transferred to the Board and its Decision and Order was issued on March 24, 1988, some five years and eleven months later. In total, the decision was rendered almost eight full years after the certification election. The Board, however, made no mention of this passage of time and offered no explanation for its delay. In its decision, the Board affirmed the ALJ except to reverse the ALJ's findings regarding four violations of section 8(a)(1) by several supervisors. The Board ordered broad remedial relief including the imposition of a bargaining order on the grounds that the unfair labor practices made " 'the possibility of erasing the effects of past practice and of ensuring a fair election (or a fair rerun) by the use of traditional remedies though present, is slight and that employee sentiment once expressed through cards, would, on balance, be better protected by a bargaining order.' " (quoting NLRB v. Gissel Packing Co., 395 U.S. 575, 614-15, 89 S.Ct. 1918, 1940-41, 23 L.Ed.2d 547 (1969)).

MW then filed a motion requesting the Board to reopen the record for rehearing and reconsideration. The basis for MW's motion was that the imposition of the bargaining order was unwarranted because much had changed during the eight full years that had passed since the time the union organizational activity began and the Board's order, and thus, more traditional remedies were adequate to ensure a fair election. In support of its motion, MW offered evidence that during that time 82.4% of the work force at the Pharr store had turned over, only one of the thirteen supervisors who were alleged to have committed unfair labor practices was still employed at the store, and the Company had no prior history of anti-union animus. The Union and the General Counsel opposed the Company's motion, arguing that denial of a bargaining order would reward rather than deter unfair labor practices.

In a brief two page opinion the Board denied the Company's motion finding that "passage of time is not a sufficient basis for denying a bargaining order." The Board also found that "even assuming the accuracy of the evidence the [Company] now seeks to adduce, that evidence does not demonstrate that a bargaining order is inappropriate." The Board concluded that "because of the nature of the unfair labor practices which we have found affected the entire bargaining unit and tended to have a lingering effect, we conclude that the possibility of ensuring a fair election by traditional means is slight and that employee sentiment reflected through authorization cards is best protected by a bargaining order." MW now appeals the Board's imposition of the bargaining order in light of the passage of time and change in circumstances. ²

II.

Under Section 10(c) of the Act, 29 U.S.C. Sec. 160(c), the Board is charged with "the task of devising remedies to effectuate the policies of the Act." NLRB v. Seven-Up Bottling Co., 344 U.S. 344, 346, 73 S.Ct. 287, 288, 97 L.Ed. 377 (1953). In NLRB v. Gissel, 395 U.S. 575, 610-16, 89 S.Ct. 1918, 1938-41, 23 L.Ed.2d 547 (1969), the Supreme Court upheld the Board's authority to order the employer to bargain with a union where the employer has committed unfair labor practices that "have a tendency to undermine majority strength and impede the election process." Id. at 614, 89 S.Ct. at 1940. The Board can impose a bargaining order where it "finds that the possibility of erasing the effects of past practices and of ensuring a fair election (or a fair rerun) by the use of traditional remedies, though present, is slight and that employee sentiment once expressed through cards would, on balance, be better protected by a bargaining order ..." Id.

In its initial decision, the Board reviewed the serious nature of the unfair labor practices by the Company and found that the Company's actions had a "lingering" and "pervasive" effect that " 'once conjured up, [are] not easily interred.' " (citation omitted). The Board then arrived at its holding that the imposition of a bargaining order was appropriate by perfunctorily determining that traditional remedies could not afford the employees relief from the Company's past unfair labor practices. In its denial of the Company's motion to reconsider, the Board accepted MW's proffered evidence concerning passage of time and change in circumstances as true but nevertheless mechanically concluded that the use of traditional remedies would be inadequate to ensure a fair election and that a bargaining order was the proper remedy.

"Once the Board has spelled out the basis for its issuance of a bargaining order, this [C]ourt's review is limited to whether the Board abused its discretion." Justak Bros. v. NLRB, 664 F.2d 1074, 1081 (7th Cir.1981). While the Board's power in fashioning remedies is a broad discretionary one, we have held that bargaining orders, due to their "drastic consequence of forcing union representation on employees and forcing the employer to bargain, are not the favored remedy." Id. Thus, "[t]o grant a bargaining order in any instance other than in the last resort (when other traditional remedies are available) constitutes an abuse of the Board's discretion." Impact Industries, Inc. v. NLRB, 847 F.2d 379, 383 (7th Cir.1988). Accordingly, we have required the Board to "give specific reasons that justify its use of the bargaining order remedy," Id.; Peerless of America, Inc. v. NLRB, 484 F.2d 1108, 1118 (7th Cir.1973). In the absence of an "express articulated consideration of the propriety of a bargaining order this court will presume that an election is the preferred means for determining representative status." NLRB v. Berger Transfer & Storage Co., 678 F.2d 679, 694 (7th Cir.1982). Most importantly for our purposes, we held in Peerless of America, that the Board must make:

"[s]pecific findings" as to the immediate and...