N.L.R.B. v. Kiawah Island Co., Ltd.

• Decision Date: 27 May 1981
• Docket Number: No. 80-1181,80-1181
• Parties: 107 L.R.R.M. (BNA) 2599, 91 Lab.Cas. P 12,775 NATIONAL LABOR RELATIONS BOARD, Petitioner, v. KIAWAH ISLAND COMPANY, LTD., Respondent.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 485

650 F.2d 485

107 L.R.R.M. (BNA) 2599, 91 Lab.Cas. P 12,775

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. KIAWAH ISLAND COMPANY, LTD., Respondent.

No. 80-1181.

United States Court of Appeals Fourth Circuit.

Argued Dec. 4, 1980.

Decided May 27, 1981.

Marlys E. Patrick, S. Portland, Me. (William A. Lubbers, Gen. Counsel, John E. Higgins, Deputy Gen. Counsel, Robert E. Allen, Acting Associate Gen. Counsel, Elliott Moore, Deputy Associate Gen. Counsel, Vivian A. Miller and Steven M. Fetter, Washington, D. C., on brief), for petitioner.

John D. Marshall, Washington, D. C. (Donald G. Mayhall, Branch & Swann, Atlanta, Ga., on brief), for respondent.

Before WINTER, SPROUSE and ERVIN, Circuit Judges.

SPROUSE, Circuit Judge:

The National Labor Relations Board petitions for enforcement of its decision and order that the respondent, Kiawah Island Co., Ltd., violated sections 8(a) (1) and 8(a)(3) of the National Labor Relations Act (Act), 29 U.S.C. §§ 158(a) (1), (3), ¹ by interfering with their employees' rights to organize a union and by terminating two kitchen employees who were responsible for initiating the organizational effort at the Company's resort.

We grant enforcement of the Board's order finding an 8(a)(1) violation, but conclude that there is not substantial evidence to sustain the Board's finding of an 8(a)(3) violation. We, therefore, deny enforcement of that part of the Board's order.

I.

Kiawah operates a 10,000-acre resort on Kiawah Island, South Carolina. It includes a 160-room oceanfront hotel, the Inn, which contains restaurant facilities. The Inn commenced operation in May 1976, and from the beginning had difficulty with maintaining proper standards of cleanliness in its food storage, preparation and service facilities. The State of South Carolina, through its Health and Environmental Agency, makes regular inspections of such facilities. There are three standard ratings: "A," "B" and "C". A grade of "C" indicates an unsatisfactory inspection and denotes an inferior operation.

The first inspection of the Inn's kitchen was made on June 1, 1976, immediately before the facility opened, and resulted in a "C" rating. At a follow-up inspection on June 4, an "A" rating was awarded. A "C" rating was again received on July 20, an "A" rating on July 27, and a "C" rating on November 30. ²

Kiawah made a number of personnel changes from June 1, 1976 through the early part of 1977, in an attempt to rectify the situation and maintain a satisfactory rating for the food facilities. The general manager, Forrest, established a regular kitchen cleanup crew on June 2 or 3, with James Hymes as supervisor, and instituted a crash cleaning program. After the July 20 "C" rating, Forrest was discharged and the chief night auditor was assigned to retrain the kitchen cleaning crew and develop procedures for them to follow. After the November 30 "C" rating, the vice-president of resort operations, Taylor, concluded that the separate kitchen cleanup crew, with Hymes as a working foreman, was inefficient and turned the total responsibility for cleanliness over to the chef, Charvet. Hymes was demoted to a nonsupervisory leadman position and his pay was reduced. Shortly thereafter, Hymes and Robert Murray (the latter had been employed as a member of the cleaning crew since November 3), contacted a representative of the Union. ³ Hymes and Murray were given authorization cards and ultimately obtained signatures from 40-50 coworkers.

Although there is some conflict in the testimony, it is apparent that Kiawah became aware of the Union's attempts to organize in early December and contacted labor counsel for advice in countering the union effort. On January 22, 1977, the senior vice-president assembled the employees and delivered a speech which contained, among other things, the following statements: "(I)f you sign that card, I think you will be sorry" and "The company is not going to let the union mess things up without a fight. I can tell you right now that the company will fight the union just as hard as the law permits and that is pretty darn hard. Unfortunately for you, when a company and a union get into a fight it is the employees who get hurt." The Administrative Law Judge and the Board found that this action threatened employees with retaliatory action for exercising their section 7 ⁴ rights.

On March 7, 1977, the Union filed a representation petition with the Board. The following week, Kiawah held a meeting of its supervisors and instructed them to explain to the employees the benefits they were currently being provided, that a union was unnecessary and that the Company was opposed to it. Supervisors Cheshire and Clifton met with employee Haywood on or about March 22, 1977, to disseminate the Company's antiunion message. Haywood asked Cheshire why she had not received a previously promised raise. She testified that he replied, "on account of the union," and that the increase would be considered a "bribe" because the Union had filed a representation petition.

On April 25, 1977, supervisor Smythe told employee Cohen he "didn't know if (Cohen) was involved with the union or not but the union probably could get (the employees) in trouble." Cohen then asked Smythe about a raise he was supposed to get; Smythe responded that Cohen had not received it because the Union had them "in a hole." Sometime after April 25, Smythe approached a group of employees. When one said something about the Union, Smythe replied, "You might get a lot of people in trouble." The Administrative Law Judge found all these actions by Kiawah to have threatened employees in violation of 8(a)(1).

II.

In NLRB v. Gissel Packing Co., 395 U.S. 575, 617, 89 S.Ct. 1918, 1941, 23 L.Ed.2d 547 (1969), the Supreme Court expressed a now familiar rule on section 8(a)(1) coercion:

Any assessment of the precise scope of employer expression, of course, must be made in the context of its labor relations setting. Thus, an employer's rights cannot outweigh the equal rights of the employees to associate freely, as those rights are embodied in § 7 and protected by § 8(a)(1) and the proviso to § 8(c). And any balancing of those rights must take into account the economic dependence of the employees on their employers, and the necessary tendency of the former, because of that relationship, to pick up intended implications of the latter that might be more readily dismissed by a more disinterested ear.

It is for the Board to make these determinations and where substantial evidence supports its conclusions an appellate court will not substitute its own judgment for that of the Board. Universal Camera Corp. v. NLRB, 340 U.S. 474, 71 S.Ct. 456, 95 L.Ed. 456 (1951); Owens-Corning Fiberglas Corp. v. NLRB, 407 F.2d 1357 (4th Cir. 1969).

Here, Kiawah, after consulting with counsel, exhibited an explicit antiunion animus in its activities countering the Union's attempts to organize. Considering all the evidence, there is substantial evidence that the vice-president's speech and the contacts made by supervisors had the effect of coercing the involved employees from exercising protected rights. We therefore grant enforcement to that part of the Board's order relating to the 8(a)(1) violations.

III.

We reach a different conclusion, however, with respect to the Board's findings that Kiawah discharged employees Hymes and Murray for their union organizational activities in violation of sections 8(a)(3) and (1) of the Act. We therefore deny enforcement of that part of the Board's order.

It is true Kiawah knew of the Union's attempt to organize when it fired Hymes and Murray. It is also true, however, that valid reasons for their discharges existed prior to, and independent of, any union activities. After the initial inspection of the Inn's food facilities, which resulted in a "C" rating, Kiawah's vice-president of resort operations, Taylor, reprimanded the general manager, Forrest. Forrest instituted a crash program to correct the deficiencies, established a regular kitchen cleanup crew and promoted a housekeeping department employee (Hymes) as supervisor. Despite these actions, however, Kiawah subsequently received "C" as well as "A" ratings and continued its efforts to improve.

After the second "C" rating was received (July 20, 1976), Forrest was discharged. Taylor temporarily assumed responsibility for managing the Inn, and the chief night auditor was assigned to retrain the kitchen cleaning crew and develop procedures for them to follow. On November 30, 1976, an inspection by the state agency again resulted in a "C" rating. Sometime between November 30 and December 2, chef Charvet recommended that Hymes and Murray be terminated. On December 2, Taylor sent a memo to certain supervisors expressing his feeling that the November 30 "C" rating was totally unacceptable and "in direct correlation to management effectiveness." He concluded that the separate kitchen cleanup crew was not going to work and ordered Charvet to assume total responsibility for the kitchen's cleanliness.

Charvet's recommendations that Hymes and Murray be terminated were submitted to food and beverage director Scott and personnel director Smith; Scott rejected the recommendations, deciding to give them another opportunity to improve their job performance, but demoted Hymes to a nonsupervisory position.

Although Hymes and Murray contacted the Union shortly after Hymes' demotion, and the Company soon became aware of their organizational efforts, Kiawah continued its efforts to obtain and maintain satisfactorily clean food facilities. Scott conducted an inspection of the kitchen facilities on February 18 and found them unsatisfactory in terms of cleanliness. Hymes and Murray, who apparently worked the evening before the inspection, were suspended for three days. The executive vice-president, Brumley, inspected the kitchen on February 26, as part of a series of inspections of all departments, and...