N.L.R.B. v. Vemco, Inc.

• Citation: 989 F.2d 1468
• Decision Date: 15 July 1993
• Docket Number: No. 92-5257,92-5257
• Parties: 142 L.R.R.M. (BNA) 2943, 124 Lab.Cas. P 10,623 NATIONAL LABOR RELATIONS BOARD, Petitioner, International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, Intervenor, v. VEMCO, INC., Respondent.
• Court: United States Courts of Appeals. United States Court of Appeals (6th Circuit)

Page 1468

989 F.2d 1468

142 L.R.R.M. (BNA) 2943, 124 Lab.Cas. P 10,623

NATIONAL LABOR RELATIONS BOARD, Petitioner International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, Intervenor, v. VEMCO, INC., Respondent.

No. 92-5257.

United States Court of Appeals Sixth Circuit.

Argued Nov. 16, 1992.

Decided April 5, 1993.

As Amended on Petition for Rehearing July 15, 1993. ^*

Rehearing and Suggestion for Rehearing En Banc

Denied Sept. 29, 1993.

Aileen A. Armstrong, Deputy Asso. Gen. Counsel, Peter Winkler, Vince Falvo (argued and briefed), N.L.R.B., Office of the Gen. Counsel, Washington, DC, petitioner.

Betsey A. Engel (briefed), Jordan Rossen, Michael B. Nicholson, Associate Gen. Counsel, Intern. Union, UAW, Detroit, MI, for intervenor.

Donald McG. Rose (argued and briefed), Frost & Jacobs, Cincinnati, OH, Sheryl A. Laughren, Francis J. Newton, Jr., Berry, Moorman, King, Cook & Hudson, Detroit, MI, for respondent.

Before: NELSON and BOGGS, Circuit Judges, and ROSENN, Senior Circuit Judge. ^**

ROSENN, Senior Circuit Judge.

This petition for enforcement of an order of the National Labor Relations Board (NLRB or Board) raises two principal issues. The first has its genesis in a mass layoff by the employer in this case. Although an uncommon phenomenon in labor relations in this country during the period of industrial growth preceding World War II, mass layoffs have not been an infrequent occurrence in the intervening years. The issue is whether the employer, Vemco, Inc., violated the National Labor Relations Act (NLRA or Act) by permanently laying off 60 employees allegedly in retaliation for their union activities. The second issue is whether the employer's conduct during the organizing campaign by the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW) so disrupted the election process as to justify a bargaining order. ¹ The Board concluded that the layoff constituted an unfair labor practice and that the employer's conduct during the organizing campaign justified the harsh remedy of a bargaining order. The Board has petitioned this court for enforcement of its order. ² We deny enforcement of those portions of the Board's order relating to the layoff and the bargaining order and order the enforcement of the remaining provisions as modified. We modify the remaining provisions of the NLRB's order relating to undisputed violations of the Act to include the traditional remedy of a rerun election and order the enforcement of these remaining provisions as modified.

I.

In 1989, the UAW filed charges with the NLRB alleging that Vemco was engaging in certain unfair labor practices in violation of the NLRA during the course of the UAW's campaign to organize Vemco's employees. After hearings, an administrative law judge (ALJ) found that Vemco had engaged in numerous unfair labor practices related to the UAW's organizing efforts. He therefore ordered Vemco, inter alia, to reinstate with back pay employees laid off allegedly because of union activity and to bargain on request with the UAW. On review, the NLRB affirmed the ALJ's decision with only slight modification.

Vemco, located in Grand Blanc, Michigan, supplies the automotive industry with large plastic exterior car parts requiring injection molding and sophisticated paint application. Vemco's executive management consists of Larry Winget, principal owner and president, Michael Torakis, vice president of finance and administration and secretary/treasurer, and James Schutz, vice president of manufacturing. Schutz is responsible for the day-to-day operations of Vemco, which first commenced operations in the spring of 1988. Winget, Torakis, and Schutz together set corporate policy and engage in corporate planning.

Vemco's three operations are molding, paint, and assembly. The paint plant is considered state of the art. For the 1989 model year, the paint plant itself was subdivided into cladding and fascia lines, with the fascia line further split into a masking area and a paint area. ³

At the time it opened its doors and throughout the 1989 automotive year, Vemco had only one customer, Buick-Oldsmobile-Cadillac Division of General Motors (BOC). BOC contracted with Vemco for fascias and claddings for several of its car models. The contract called for delivery to commence in August 1988, with projected quantity requirements to increase weekly over the fall of the year as BOC increased its own manufacturing. The contractual penalty for a failure to deliver according to the industry practice of just-in-time (JIT) shipping causing downtime on a BOC assembly line ran as high as $25,000 per minute of downtime. ⁴

Vemco's high-tech paint system did not function as planned when Vemco began operations because of major technical problems in many of the components of the system. The company that designed and built the paint system eventually walked off the project, leaving Vemco to identify and correct these problems with its own personnel and other outside contractors. Ultimately, the system had to be redesigned and rebuilt at the same time BOC's increasing delivery requirements had to be met.

As a result of its technical problems, Vemco was unable to produce a product that consistently met quality standards the first time through and had to rework enormous numbers of unacceptable parts. Because of the severe economic consequences of a failure to timely deliver to BOC, Vemco ended up with many more employees working much longer hours than originally forecast. By mid-December, Vemco was running a second shift on both the fascia and cladding lines, partially to relieve the 60 to 84 hour weeks its employees had been working and partially in anticipation of orders from Ford Motor Company, which, if obtained, would have required a fully trained second shift to produce.

By early 1989, Vemco succeeded in "debugging" in part its paint operation. As a result, workhours decreased and productivity increased. These productivity gains resulted in a shortage of workhours for Vemco's employees. By mid-January, both shifts on the fascia lines were reduced to a four-day workweek, and Vemco considered going to a three-day workweek. At this point, employees expressed unhappiness with the sharp decline in hours and apprehension over further hourly reductions and possible layoffs.

Vemco has a non-union philosophy that is clearly expressed in its Personnel Policies Handbook that all employees receive and sign for at the time of their orientation. Some Vemco employees, however, became interested in unionizing soon after the company opened, and by late September employees had made telephone inquiries of the UAW. An initial union meeting was held in early October 1988, attracting 50 employees. Periodic meetings were held thereafter, including more or less weekly gatherings between January and March of 1989. Both Schutz and Torakis were aware of general union activity by October 1988. Line supervisors, who were also aware of this general union activity, committed several unfair labor practices during the period between Vemco's start-up and the March 1989 mass layoff.

II.

A. STANDARD OF REVIEW

The NLRB's findings of facts, as well as its application of law to fact, may not be disturbed where substantial evidence on the record taken as a whole supports the Board's findings and conclusions. Universal Camera Corp. v. NLRB, 340 U.S. 474, 488, 71 S.Ct. 456, 465, 95 L.Ed. 456 (1951); Turnbull Cone Baking Co. v. NLRB, 778 F.2d 292, 295 (6th Cir.1985), cert. denied, 476 U.S. 1159, 106 S.Ct. 2277, 90 L.Ed.2d 720 (1986); 29 U.S.C. § 160(e), (f). As a guide to determining whether the substantial evidence standard has been met, this court stated:

Evidence is considered substantial if it is adequate, in a reasonable mind, to uphold the decision. Universal Camera, 340 U.S. at 477 . The appellate court should consider the evidence contrary to the Board's conclusions, but may not conduct de novo review of the record. Union Carbide Corp. v. NLRB, 714 F.2d 657, 660 (6th Cir.1983).

Turnbull, 778 F.2d at 295. Questions of law, however, are reviewed de novo. NLRB v. C.J.R. Transfer, Inc., 936 F.2d 279, 281 (6th Cir.1991).

B. REVIEW OF UNCONTESTED VIOLATIONS

1. Uncontested Violations and the Contested Use of Protected Speech

The General Counsel of the NLRB (GC) points out that Vemco does not contest various section 8(a)(1) violations occurring before both the mass layoff of March 17, 1989, and the representation election at the end of September 1989. Vemco also does not challenge section 8(a)(1) and (3) violations involving an employee named Greg Hall. We therefore will not review these violations to ascertain whether there is substantial record evidence to support them. Hyatt Corp. v. NLRB, 939 F.2d 361, 368 (6th Cir.1991).

Vemco, however, has vigorously objected to the Board's reliance on certain employer speech to find violations of section 8(a)(1) because this speech was allegedly protected by section 8(c) of the Act. ⁵ Because the Board then used violations based on this allegedly protected speech as evidence to support both the layoff violation and the bargaining order, the uncontested violations must be reviewed to the extent that they may contain protected speech. If protected speech is found, the evidentiary value of these uncontested violations supporting the alleged layoff violation and the bargaining order must be reconsidered. This may then affect our determination of whether the Board's conclusions regarding the layoff and the bargaining order are supported by substantial evidence.

2. The Evidentiary Value of Protected Speech

Statutory interpretation is a matter of law that we review de novo. See, e.g., United States v. Hans, 921 F.2d 81, 82 (6th Cir.1990). Section 8(c) of the Act basically defines protected speech as the expression of views, argument, or opinion, whether in spoken or written form, that...