N.L.R.B. v. Klaue

• Decision Date: 22 September 1975
• Docket Number: 74-1824,Nos. 74-1696,s. 74-1696
• Citation: 523 F.2d 410
• Parties: 90 L.R.R.M. (BNA) 2678, 77 Lab.Cas. P 11,102 NATIONAL LABOR RELATIONS BOARD, Petitioner, v. J. Byron KLAUE, d/b/a Electro Mart, Respondent.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 410

523 F.2d 410

90 L.R.R.M. (BNA) 2678, 77 Lab.Cas. P 11,102

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. J. Byron KLAUE, d/b/a Electro Mart, Respondent.

Nos. 74-1696, 74-1824.

United States Court of Appeals Ninth Circuit.

Sept. 22, 1975.

Elliott Moore, Deputy Associate Gen. Counsel, N. L. R. B. (argued), Washington, D. C., for petitioner.

James J. Workland (argued), of Hennessey, Curuan, Kelly & Workland, Spokane, Wash., for respondent.

OPINION

Before BARNES, WRIGHT and GOODWIN, Circuit Judges.

EUGENE A. WRIGHT, Circuit Judge:

The National Labor Relations Board's Decision and Order is reported at 207 N.L.R.B. No. 131 and the Board here seeks enforcement of that order. J. Byron Klaue, d/b/a Electro Mart, the employer, has cross-petitioned for review. ¹

The Board order adopted the decision of an administrative law judge, holding the employer had engaged in these unfair labor practices: (1) discriminatory discharge of an employee in violation of Sections 8(a)(3) and 8(a)(1) of the National Labor Relations Act, and (2) coercive interrogation of employees in violation of Section 8(a)(1) of the Act. ² The employer was ordered to cease and desist from interrogating or threatening any employee concerning union or concerted activities and from making discriminatory discharges. He was further ordered to reinstate the discharged employee with back pay from the date of discharge.

Klaue, the owner of a furniture and appliance store, hired Vincent Rago as a commission salesman in September 1970. The employer was then investigating the possibility of acquiring health and accident insurance for his employees but, as of April 1971, had not obtained it. The continuing lack of insurance convinced the salesmen that they should seek union advice to see what insurance it might offer.

Rago and another salesman met with a union representative on April 15, 1971 and it was decided that the salesmen should talk to the other employees about meeting at the union hall on April 21. It was also decided that the employees should conceal their union activities from the three members of management: Klaue, supervisor Cowell, and sales manager Rodgers.

The events which led to the charge of unfair labor practices took place on April 21. Rago came to work at noon and joined a discussion among some employees concerning the union meeting that night. The discussion ended shortly thereafter when someone said, "Mr. Klaue is right around the corner and he can hear you."

Rago then went upstairs to the office where he received his regular commission check for the two preceding weeks. While there, supervisor Cowell said, "I hear you are going to that union meeting tonight." Rago said, "Yes," and Cowell remarked, "Well, when you go, you had better have some job leads handy." Rago asked, "Are you kidding? Is it that bad?" Cowell responded that it was, then left the office.

At about 1:00 P.M. Rago had a conversation with the owner's son, James Klaue, who was employed at the store. He told James for the first time about the meeting that night and they agreed that the fact of the meeting should be kept secret from the senior Klaue. James then left to make deliveries, not returning for the balance of the afternoon.

At 3:00 P.M. Rago was summoned to the office of Klaue, the owner. Klaue told Rago that he was discharging him because "you are too good of a man to sit around with no business coming in the door and it is not going to be good for you." Klaue thought that Rago "could do better somewhere else." Rago contradicted Klaue, stating that the real reason for the discharge was his involvement in the union meeting. Klaue denied having any previous knowledge of the meeting. ³

Shortly after Rago left the store Kimmel and Walker, two other salesmen were called to Klaue's office. Klaue "questioned them whether they would honor their commitment regarding concerted activity or whether they would remain loyal members of his 'team'." ⁴ Kimmel asked if Rago had been terminated because of his union activities and Klaue replied in the negative.

Approximately two months after the discharge, unfair labor practice charges were filed against Klaue.

The primary issue for our consideration is whether there is substantial evidence viewing the record as a whole to support the Board's findings that the employer engaged in unfair labor practices. Universal Camera Corp. v. N.L.R.B., 340 U.S. 474, 488, 71 S.Ct. 456, 95 L.Ed. 456 (1951).

THE DISCHARGE OF RAGO

In order to establish a violation of Section 8(a)(3) and 8(a)(1) the Board has the burden of showing that the discharge was illegally motivated. Famet, Inc. v. N.L.R.B., 490 F.2d 293, 296 (9th Cir. 1973). In the absence of other circumstances, an employer has the right to discharge its employees. N.L.R.B. v. Ayer Lar Sanitarium, 436 F.2d 45, 49 (9th Cir. 1970). A business reason for a discharge cannot be asserted as a pretext, however, if in fact the discharge was motivated by the employee's union activities. The Board must establish that the employee would not have been discharged but for his union activity in order to establish a violation. Ayer Lar, supra at 50.

The critical question is whether the employer was aware of Rago's union activity prior to the discharge. If Klaue did not know it, then such activity could not have motivated the discharge and the order of the Board would not be justified. See Santa Fe Drilling Co. v. N.L.R.B., 416 F.2d 725, 732 (9th Cir. 1969). Since direct evidence of the state of the employer's knowledge is often unavailable, the Board may use circumstantial evidence to establish the employer's awareness of union activities. N.L.R.B. v. Miller Redwood Co., 407 F.2d 1366, 1369 (9th Cir. 1969). Such inferences will be upheld if reasonable even though we might have drawn equally reasonable but opposing inferences. N.L.R.B. v. Walton Mfg. Co., 369 U.S. 404, 405, 82 S.Ct. 853, 7 L.Ed.2d 829 (1962); Famet, supra at 295.

The administrative law judge concluded that Klaue was aware of Rago's union activities on the basis of inferences drawn from several factual findings, most of which were adopted by the Board. ⁵ In examining these inferences, we find that the record as a whole does not contain substantial evidence to support the factual findings upon which the inferences are premised and thus the conclusion that Klaue was aware of Rago's activities is unreasonable.

The administrative law judge inferred that Klaue knew of Rago's activities because "everyone else" in his employ knew of it. We need not decide whether, if true, this would reasonably lead to the conclusion that Klaue also knew because supervisor Rodgers, one of only two other management personnel in addition to Klaue, testified that he did not know of the employee's union activity. This indicates that the employees were at least partially successful in their attempts to conceal the union meeting. The finding that "everyone else" knew is not supported by substantial evidence and therefore does not provide an adequate basis from which knowledge by Klaue of Rago's activities can reasonably be inferred.

Nor could the knowledge of supervisor Cowell or confidential secretary Rigby, both of whom were aware of the union meeting, be properly imputed to Klaue. No evidence was adduced which supports the proposition that either Cowell or Rigby spoke to Klaue about it. There was evidence to the contrary. Rigby had in the past failed to inform Klaue of violations of store rules and of deficiencies in Rago's paperwork. In light of these previous instances of non-disclosure by Rigby and in the absence of direct evidence that either Cowell or Rigby told Klaue of Rago's activity, it is unreasonable to impute their knowledge to the...