N.L.R.B. v. Quick Find Co.

• Decision Date: 24 January 1983
• Docket Number: No. 82-1353,82-1353
• Citation: 698 F.2d 355
• Parties: 112 L.R.R.M. (BNA) 2968, 96 Lab.Cas. P 13,987 NATIONAL LABOR RELATIONS BOARD, Petitioner, v. QUICK FIND CO., Respondent.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 355

698 F.2d 355

112 L.R.R.M. (BNA) 2968, 96 Lab.Cas. P 13,987

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. QUICK FIND CO., Respondent.

No. 82-1353.

United States Court of Appeals Eighth Circuit.

Submitted Oct. 15, 1982.

Decided Jan. 24, 1983.

Thomas M. Hanna, Thomas G. Bearden, McMahon, Berger, Breckenridge, Hanna, Linihan & Cody, St. Louis, Mo., for respondent.

William A. Lubbers, Gen. Counsel, John E. Higgins, Jr., Deputy Gen. Counsel, Robert E. Allen, Associate Gen. Counsel, Elliott Moore, Deputy Associate Gen. Counsel, Peter M. Bernstein, Susan L. Dolin, Washington, D.C., for N.L.R.B.

Before BRIGHT and ARNOLD, Circuit Judges, and HUNTER, District Judge. ^*

BRIGHT, Circuit Judge.

The National Labor Relations Board (NLRB) petitions this court for an order enforcing its January 13, 1982 order against Quick Find Company (Quick Find). The NLRB determined that Quick Find violated section 8(a)(1) and (3) of the National Labor Relations Act, 29 U.S.C. Sec. 158(a)(1), (3) (1976) (the Act), during a unionization drive among the company's production employees in the fall of 1980. Quick Find's violations included, inter alia, laying off most of the employees two weeks after receiving notice of a petition for union recognition, unlawfully soliciting and promising to rectify employee grievances, coercively interrogating employees, and threatening loss of benefits and jobs through intimation and innuendo. At issue on this appeal is whether substantial evidence supports the NLRB's conclusions. ¹ We affirm the Board's order with respect to the section 8(a)(3) and two of the section 8(a)(1) violations. As to two additional section 8(a)(1) violations, however, we find that substantial evidence does not support enforcement.

I. Background.

Quick Find Company is a small business located in St. Louis, Missouri. Quick Find manufactures steel material chests to fit in pickup trucks and vans. Dwight Gold, the president and founder of the company, and Nathan Fogel, the general manager since the summer of 1980, comprise the company's management. At the time of the labor dispute underlying this lawsuit, Quick Find employed seven full-time production workers and one clerical worker, as well as Gold, Fogel, and some sales personnel.

In October of 1980, ² the seven full-time production employees met with representatives of Teamsters Local Union 688 to discuss the possibility of unionizing. All seven signed authorization cards, and on October 22, the union filed a petition for recognition with the NLRB. Two weeks later, on November 6, Quick Find laid off all but two of the production employees. Thereafter, the management and certain employees engaged in several conversations that the employees claimed were unlawfully coercive. On November 13, the union filed an unfair labor practice charge, alleging that Quick Find had committed numerous violations of section 8(a)(1) and (3). The representation election took place on January 9, 1981. On February 5 and 6, 1981, an administrative law judge heard both the unfair labor practice charge and the company's challenges to certain ballots cast in the representation election. The administrative law judge, whose opinion the NLRB adopted, held that Quick Find committed several violations of section 8(a)(1) and (3) of the Act. Quick Find opposes the Board's petition for enforcement of its order and challenges the Board's findings.

II. Section 8(a)(3) Violation--the November 6 Layoff.

Quick Find laid off five of its seven production employees on November 6 and later recalled them to the active work force beginning December 26. ³ During the intervening weeks, the two remaining employees, Eugene Emily and Milton Kernebeck, constructed safety guards around the punch presses and continued production at a reduced level. Quick Find asserts that the layoffs were necessary because of excessive inventory, a downturn in sales, and a deliberate production slowdown by the employees. The NLRB considered and rejected this alleged business justification, however, finding instead that the layoffs were caused by anti-union animus. ⁴

The dispute over the reason for the November layoffs focused primarily on the size of Quick Find's inventory, and on whether the size of the inventory would have triggered the layoffs absent a unionization threat. Quick Find's records show that as of November 6, there were 125 finished units in stock. Both Fogel and Gold testified that at that level, the inventory was too large and consumed all available storage space. Fogel estimated the ideal carrying level for inventory to be 50-60 units, while Gold claimed to be happiest with an inventory of zero. The inventory records, which extend back only through July 1980, show a wide variance in inventory levels, from a low of 44 units on July 16 to a high of 130 units on October 30. It appears that the company generally produced units at a fairly steady pace and then shipped them out as orders arrived. Thus, the fluctuation in inventory resulted primarily from the sporadic nature of incoming orders.

One of the principal reasons advanced by the Board in rejecting Quick Find's argument that it imposed the November layoff solely in response to an inventory buildup related to a comparison of the response by Quick Find to an earlier incident where inventories had built up and layoffs had occurred. In May 1980, the company had laid off all but one of its production employees, again purportedly due to lack of space for inventory. Although the company records only go back to July 1980, the employee responsible for keeping the daily inventory count testified that there were some 150 finished units on hand at the time of the May layoff. Despite the fact that the inventory buildup in May exceeded the November level by 25 units, Quick Find laid off the employees in May only partially, each continuing to work 1-4 days per week before being called back to work full-time as of June 19. In contrast, Quick Find completely laid off the employees in November for over a month and a half.

The NLRB determined that Quick Find's more severe response to less severe business conditions in November reflected a reason other than mere business necessity. The NLRB inferred anti-union animus from circumstances attendant to the November incident. The Board noted that the layoff action occurred within two weeks after Quick Find learned of the union's petition for recognition. Quick Find's timing of the layoff appeared especially suspicious because the inventory had equalled or exceeded 125 units on several days during the prior month; yet the company did not choose to impose a layoff until after the union drive had begun. ⁵

Despite the fact that the inventory was lower in November than in May, Fogel maintained that "[i]t wouldn't have crossed my mind to lay [the employees] off at this time if there was room for storage." Fogel explained that business conditions required a full layoff rather than a rotational layoff because traditionally sales were slow in December. He testified that he believed production would suffer from a rotational system. In a similar vein, Gold also claimed that the overstock was more severe in November than in May and that prior to the layoff, the men had deliberately slowed down production to forestall a layoff. However, Quick Find did not introduce evidence to establish that these or similar circumstances did not also exist in May. Accordingly, the NLRB found that the Company did not adequately distinguish the May and November layoffs.

Two additional factors contributed to the NLRB's finding of anti-union motivation for the November layoffs. First, the Board found that Quick Find attempted to use the layoffs to invalidate the votes of all the laid-off employees by invoking a company rule that employees absent from active work for more than three successive days would lose their employee status. ⁶ Second, Susan Emily, the company secretary, testified that shortly after the layoff, Gold instructed her to refrain from shipping any orders for several days. ⁷ The Board interpreted this as an attempt to pad the inventory in order to justify the layoffs.

Quick Find argues that the NLRB failed to adequately consider all of the evidence concerning the layoffs. The company points out that the two employees most responsible for bringing in the union were the two employees retained during the layoff. Quick Find also complains that the Board ignored the downturn in sales and the employees' work slowdown as factors contributing to the layoff decision.

After reviewing the record, we conclude that substantial evidence supports the Board's conclusion that the layoffs were unlawful. The Board's concentration on inventory size to the exclusion of the other elements of the company's business justification reflects the repeated testimony of Quick Find's own witnesses that inventory predominantly determined the layoffs. Moreover, Quick Find's witnesses could not adequately explain the suspicious timing of the layoffs nor the discrepancies between the May and November layoffs. When pressed for an explanation, Gold professed to have forgotten many of the circumstances of the May layoff altogether. Quick Find's strongest argument is that it retained the two most vigorous union activists. Their retention, however, may be explained by the company's need to retain its two most knowledgeable and skillful production employees. Although the issue is close, we cannot say that the Board's determination lacks support from substantial evidence in the record. Accordingly, we grant enforcement on this issue.

III. Section 8(a)(1) Violations.

A. November 7.

The NLRB determined that on November 7, in a conversation among Milton Kernebeck, Eugene and Susan Emily, and Nathan Fogel, Fogel unlawfully discouraged unionization by soliciting grievances and promising to remedy them. The accounts rendered by the four participants are all substantially similar and...