N.L.R.B. v. Cornell of California, Inc.
| Decision Date | 14 June 1978 |
| Docket Number | No. 76-1545,76-1545 |
| Citation | 577 F.2d 513 |
| Parties | 98 L.R.R.M. (BNA) 3317, 84 Lab.Cas. P 10,742 NATIONAL LABOR RELATIONS BOARD, Petitioner, v. CORNELL OF CALIFORNIA, INC., Respondent. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Elliott Moore, Washington, D.C., for petitioner.
George King and Arthur W. Ruthbenbeck of Boornazian & Schulze, Oakland, Cal., for respondent.
Petition for Enforcement of Order of the National Labor Relations Board.
Before DUNIWAY, CUMMINGS, * and SNEED, Circuit Judges.
The National Labor Relations Board petitions for enforcement of its order requiring respondent Cornell of California, Inc. to recognize and upon request bargain with the Northern California Joint Board, Amalgamated Clothing Workers of America. Because the Company does not dispute that it refused to bargain but rather insists that its refusal was lawful, the key question is whether substantial evidence supports the Board's finding that Cornell had no good faith doubt of the Union's majority status sufficient to relieve Cornell of the legal obligation to recognize the Union and to bargain under Sections 8(a)(1) and 8(a)(5) of the Act (29 U.S.C. §§ 158(a)(1) and 158(a)(5)). We think that question must be answered in the affirmative and therefore grant the Board's petition.
The facts that led the Board to order recognition and bargaining begin with the Company's recognition of the Union in 1971. In October of that year, the Company and the Union executed a collective bargaining agreement effective through December 31, 1974. In September of 1974, the Union requested by letter that the Company bargain with the Union over terms for a new contract.
Foreshadowing the events that followed, the Company did not respond to the Union's request. Apparently the parties initially delayed meeting due to the hospitalization of Company President Cornell, but when Union Business Manager Siegel met with Cornell in October he was told the Company could not "live with" the agreement. A few days later the Company petitioned for a Board election, and in November the Company ceased checking off Union dues, even though the checkoff agreement was still in effect. At least in part based on these actions, on November 7, 1974, the Union filed the unfair labor practice charge that led to this proceeding.
About three weeks after filing the charge, Siegel met with Cornell and was told again after presenting the Union's demands that Cornell "could not live with it." Shortly thereafter, the Company's attorney, George King, told Siegel that the Company would meet with him if the Union would agree to hold an election. Siegel refused.
In January, after the 1971 contract had expired, Siegel demanded that unilateral changes in the terms and conditions of employment not be made and informed Cornell at a luncheon meeting that it still was not too late to bargain. With apparently only one exception, the parties did not meet again until June when Siegel and his successor as Business Manager, Sam Krips, met Cornell and King for lunch. In response to a question by Krips en route to that lunch, Cornell explained that he was paying an attorney instead of paying more to the employees because his attorney was not costing much and because Cornell would "like to break the contract anyway." Despite the asserted low cost of his services, according to Cornell, King was skilled at achieving the objective sought. Cornell also explained at lunch that he wanted to "get out of the contract" because his was the only organized tie factory in Northern California and that he was not going to pay the Union's "ridiculous" wage rates and health and welfare costs.
As attorney King started to leave the luncheon meeting, Krips, seeking to arrange another conference, asked when they would meet again and King replied: "in the N.L.R.B. hearing." When they did meet again at that hearing in August 1975, the Company contended that it had refused to bargain based on a good faith doubt of the Union's majority status. Apparently the Company had first expressed such doubt in January 1975 in its answer to the Regional Director's unfair labor practice complaint.
At the Board hearing, the Company presented evidence showing that commencing in June of 1974 and continuing for the following four to six weeks, employees communicated their dissatisfaction with the Union to Julius Kozak, the Company's General Manager. Kozak testified that four different employees contacted him, 1 some on more than one occasion, and identified specific concern with the lack of a Union contract, ineffectual representation, disruptive meetings and a lack of benefits commensurate with the dues paid. Three of these employees informed Kozak that approximately 15 out of the 20 employees in the unit 2 also were dissatisfied with the Union but were afraid to express their views. At least once Kozak was asked how employees could "get out of the Union."
Kozak informed Cornell of these contacts and Cornell responded that he would have to take the matter up with someone conversant with the law. Cornell also was contacted by the same four employees and on another occasion spoke with three or four employees on the subject, but it is not clear whether the latter group was the same as that involved in the earlier conversations.
Nine employees subpoenaed by the General Counsel, including the group of four who were clearly identified as having spoken to Kozak and Cornell, were present at the Board hearing but were not called by either party. After a one-day hearing on August 26, 1975, the Administrative Law Judge handed down a decision finding that the Company had violated Sections 8(a)(1) and 8(a)(5) by withdrawing recognition and failing to bargain with the Union from November 25, 1974. Accordingly, the ALJ ordered the Company first to cease and desist from refusing to recognize the Union and from interfering with employee rights in any like or related manner. Affirmatively, the order required the Company to recognize and upon request bargain with the Union. On January 16, 1976 the Board affirmed the findings, rulings and conclusions of the ALJ and adopted his recommended order.
In rejecting the Company's claim of good faith doubt, the ALJ's opinion and the Board first reasoned that the "supposition and rumor" introduced by the Company in the absence of more manifest "authoritative verification or indicia of employee disaffiliation" was an insufficient basis for a reasonable doubt. They also reasoned that the Company's tactics "cast a pall of suspicion over Respondent's claimed legal justification" and therefore indicated that the Company's doubts were not held in good faith. We consider each of those reasons in order.
Both parties agree that although a union enjoys a rebuttable presumption of continued majority status, an employer lawfully may withdraw recognition from an incumbent union because of its asserted good faith doubt of the union's continuing majority status, if that doubt is reasonable and supported by objective considerations. See e. g., Terrell Machine Co. v. N. L. R. B., 427 F.2d 1088, 1090 (4th Cir. 1970), certiorari denied, 398 U.S. 929, 90 S.Ct. 1821, 26 L.Ed.2d 91; N. L. R. B. v. Little Rock Downtowner, Inc., 414 F.2d 1084, 1091 (8th Cir. 1969). Their primary disagreement in applying that principle to this case is over the question whether statements by a minority of unit employees to the effect that a majority want to be free of the Union are sufficient to justify the requisite good faith doubt.
Although the Company cites numerous cases allegedly proving that the Board or courts have found such employee assertions sufficient in the past, our reading of those cases is consistent with the Board's position on this appeal that assuming such evidence may be one basis upon which a reasonable doubt could rest, 3 in the absence of special circumstances it has not been held to be and should not be sufficient by itself. In nearly all the cases cited by the Company, the assertion that the majority disliked the incumbent union was accompanied by evidence of some identifiable acts by the majority (or at least by a substantial number of the non-complaining employees) that lent support to the assertion of dissatisfaction: failure to sign cards of the incumbent Union, 4 increasing refusals to authorize dues checkoffs, 5 sufficient signing of decertification petitions, 6 significant resignations from the union, 7 direct communication of dissatisfaction to the employer by a majority of unit employees, 8 or widespread refusals by the employees to participate in union activities. 9
This distinction based on a preference for objective, identifiable acts is not a technical one but rather is based on an interpretation of what is sufficient to form a reasonable doubt. First, the preference for some positive act by those whose anti-union sympathies are asserted reduces the likelihood that the minority of employees who make the assertions are mistaken or have misinterpreted statements by their colleagues. Cf. Retired Persons Pharmacy v. N. L. R. B., 519 F.2d 486, 490 (2d Cir. 1975); note 2 supra. Second, this distinction avoids allowing a few employees to undermine their union merely by making an assertion that is not easily verified by the employer. Our reference to this distinction is not meant to indicate that these objective acts necessarily are proof of loss of majority status or can constitute good faith doubt thereof, 10 nor is it meant to imply that establishing a good faith doubt requires actual proof that a majority of employees do not support the union; rather it means only that an employer cannot satisfy its burden of proof that the doubts were reasonable (see Retired Persons Pharmacy, supra at 489-490) by resting exclusively on such normally unreliable assertions. See N. L. R. B. v. Crimptex, Inc., 517...
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