N.L.R.B. v. Cutting, Inc.
| Decision Date | 02 March 1983 |
| Docket Number | No. 81-2204,81-2204 |
| Citation | 701 F.2d 659 |
| Parties | 112 L.R.R.M. (BNA) 3056, 96 Lab.Cas. P 14,126 NATIONAL LABOR RELATIONS BOARD, Petitioner, v. CUTTING, INC., Respondent. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Susan Williams and Elliott Moore, N.L.R.B., Washington, D.C., for petitioner.
John T. Neighbours, Indianapolis, Ind., for respondent.
Before WOOD and ESCHBACH, Circuit Judges, and LARSON, Senior District Judge. *
This case is before us upon application of the National Labor Relations Board (the "Board") for enforcement of its decision and order against Cutting, Inc. ("Cutting" or the "Company") 1. The Board adopted the findings of the Administrative Law Judge ("ALJ") that Cutting violated section 8(a)(1) of the National Labor Relations Act (the "Act"), 29 U.S.C. Sec. 158(a)(1) (1976), by threatening to close the Hartford plants, by engaging in repeated coercive interrogation of employees about union activities, by engaging in unlawful surveillance of peaceful picketing, by threatening employees with legal proceedings for lawfully striking and picketing, and by threatening to discharge the local union president because of his union activities. The Board also adopted the ALJ's findings that the Company violated sections 8(a)(1) and 8(a)(3) of the Act by assigning employees Pamela O'Connell and Frances Griffey more arduous job tasks because of their union support, by discriminatorily suspending them from work for three days, by issuing O'Connell an unwarranted written disciplinary warning, and by refusing to reinstate O'Connell, Griffey, and other former striking employees after they unconditionally offered to return to work. Finally, the Board agreed with the ALJ that the Company had not violated the Act in discharging employee Rick Hodge but disagreed with the ALJ's conclusion that there was no section 8(a)(1) violation arising from the Company's solicitation of employee grievances prior to the union election.
The Board adopted the ALJ's recommended order requiring Cutting to cease and desist from engaging in the kinds of unlawful conduct with which it was charged, to reinstate O'Connell, and to pay lost compensation to all former strikers who were not immediately reinstated when they unconditionally offered to return to work. After finding the Company had committed "multiple and flagrant" violations, the Board also added a provision generally requiring Cutting to cease and desist from "in any other manner" interfering with, restraining or coercing employees in the exercise of rights guaranteed under section 7 of the Act.
Cutting does not dispute the findings of the Board other than those relating to its failure to reinstate O'Connell and the other former economic strikers when they unconditionally offered to return to work. The Company states it is willing to comply with all orders of the Board except those which are the result of its refusal to reinstate the strikers and the provision requiring it to cease and desist from "in any other manner" interfering with, restraining, or coercing employees in the exercise of their section 7 rights. Consequently, the only issues before this court are: (1) whether the Board's finding of unlawful refusal to reinstate former economic strikers is supported by substantial evidence on the record considered as a whole, (2) whether it was a denial of procedural due process for the Board to rule on the refusal to reinstate employees other than O'Connell when the Board's complaint only alleged that the refusal to reinstate O'Connell was unlawful, (3) whether the Board improperly expanded the scope of the ALJ's recommended order by requiring Cutting to cease and desist from "in any other manner" interfering with, restraining, or coercing employees in the exercise of rights guaranteed under section 7 of the Act.
Cutting operates two plants in Hartford City, Indiana, which produce paper rolls for business machines. In June of 1979, the United Paperworkers International Union (the "Union") was certified as the collective bargaining representative for the production and maintenance employees at both Hartford City plants. After several months of unsuccessful negotiations for its first agreement, the Union called for an economic strike to begin Thursday, October 11. 2 On that day, the Company began advertising for permanent replacements in the local newspaper.
Monday morning, October 15, Cutting's Plant Manager, Clyde Griffith, was observed speaking with a reporter from the Hartford City News Times. Griffith told the reporter that if the striking employees did not return to work they would be permanently replaced. That afternoon the newspaper carried an article which purported to quote Griffith as saying the strikers "will be permanently replaced tomorrow if they don't report to work." Strikers who read the article believed they had until Tuesday, October 16 to return to work. Consequently, at about 7:00 p.m. Monday evening, Union President David Lillard phoned Griffith to tell him the strike was over and the employees would be returning to work. Griffith replied it was too late because permanent replacements had already been hired. The former strikers nevertheless reported for work at 7:00 a.m. the next morning. Again they were told they were too late because they had been permanently replaced. None of the replacements actually began work until Wednesday, October 17.
The evening of October 16 or 17, Griffith called Lillard to offer the former strikers work on a new midnight shift at Plant 1 beginning Sunday, October 21. Lillard checked with the other employees and found all would accept work on the third shift except for O'Connell who advised she could not obtain care for her four children at that time because her husband worked swing shift at another company. Lillard reported back to Griffith that everyone would be returning except O'Connell. When Griffith asked Lillard if he knew why O'Connell was not returning, Lillard replied: "Yes, I think she's going to stay home and be a housewife." On the basis of that conversation, Griffith instructed Personnel Assistant Zella Taylor to complete a Company termination form for O'Connell which stated:
On October 21, all the former strikers except O'Connell returned to work on the third shift. According to Griffith, the new shift had no economic justification but was merely created as a gesture of good will to put the former strikers back to work and to boost employee morale. However, about a week after it began, the third shift was abolished and the former strikers were reassigned to jobs on the first and second shifts at Plant 1. At no time was O'Connell, who had been employed at Plant 2, offered a position on either shift at Plant 1. At no time after the morning of October 16 did O'Connell contact the Company to inquire about reinstatement. Finally, in February of 1980, all the replacements hired during the strike were laid off while the former strikers were retained.
Although employees engaged in an economic strike are entitled to reinstatement upon making an unconditional offer to return to work, an employer may refuse to reinstate them if it has a "legitimate and substantial business justification" for doing so. NLRB v. Fleetwood Trailer Co., 389 U.S. 375, 379, 88 S.Ct. 543, 546, 19 L.Ed.2d 614 (1967); NLRB v. Mars Sales & Equipment Co., 626 F.2d 567, 572 (7th Cir.1980); NLRB v. Murray Products, Inc., 584 F.2d 934, 938 (9th Cir.1978). Employment of permanent replacements has long been recognized as a legitimate business justification on the grounds that an employer has the right to continue business operations during a strike and presumably cannot obtain replacements for that purpose unless it offers them permanent employment. NLRB v. Mars Sales & Equipment Co., 626 F.2d at 572-73; see NLRB v. Mackay Radio & Telegraph Co., 304 U.S. 333, 345-46, 58 S.Ct. 904, 910-11, 82 L.Ed. 1381 (1938). However, an employer may not legitimately refuse to reinstate employees to positions which have not been filled by replacements. Thus, once it has been established that the employer refused to reinstate strikers who unconditionally offered to return to work, the burden shifts to the employer to prove it hired replacements on a permanent basis before it received the strikers' offer. NLRB v. Murray Products, Inc., 584 F.2d at 939; National Fruit and Vegetable Co. v. NLRB, 565 F.2d 1331, 1337 (5th Cir.1978); American Machinery Corp. v. NLRB, 424 F.2d 1321, 1327 n. 9 (5th Cir.1970). Without such proof, the refusal to reinstate constitutes an unfair labor practice despite the absence of bad faith or anti-union animus. NLRB v. Murray Products, Inc., 584 F.2d at 939.
At this stage of the proceedings, it is undisputed that Cutting refused to reinstate strikers who unconditionally offered to return to work on the morning of October 16, 1979. At issue is whether or not it proved it hired permanent replacements before it received the strikers' offer and denied them reinstatement. The ALJ found it did not despite the fact Cutting produced five management witnesses who gave uncontradicted testimony that replacements were hired by the end of the afternoon of October 15. The ALJ discredited the parts of their testimony designating the 15th as the hiring date and concluded that the credible parts described events which took place on the 16th. The Board adopted the findings and conclusions of the ALJ on this issue, citing its policy "not to overrule an administrative law judge's resolutions with respect to credibility unless a clear preponderance of the evidence convinces us that the resolutions are incorrect."
This court must determine whether the Board's findings are supported by "substantial evidence...
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