N.L.R.B. v. Townhouse T.V. & Appliances, Inc.

• Decision Date: 05 March 1976
• Docket Number: No. 75--1284,75--1284
• Citation: 531 F.2d 826
• Parties: 91 L.R.R.M. (BNA) 2636, 42 A.L.R.Fed. 411, 78 Lab.Cas. P 11,292 NATIONAL LABOR RELATIONS BOARD, Petitioner, v. TOWNHOUSE T.V. & APPLIANCES, INC., Respondent.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 826

531 F.2d 826

91 L.R.R.M. (BNA) 2636, 42 A.L.R.Fed. 411,

78 Lab.Cas. P 11,292

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. TOWNHOUSE T.V. & APPLIANCES, INC., Respondent.

No. 75--1284.

United States Court of Appeals, Seventh Circuit.

Argued Dec. 5, 1975.

Decided March 5, 1976.

Elliott Moore, Deputy Assoc. Gen. Counsel, Paul J. Spielberg, Jane P. Schlaifer, Attys., N.L.R.B., Washington, D.C., for petitioner.

William J. Kiley, William R. Sullivan, Jr., Chicago, Ill., for respondent.

Before CUMMINGS and BAUER, Circuit Judges, and McLAREN, District Judge. ^*

PER CURIAM.

In this enforcement proceeding the National Labor Relations Board ('the Board'), seeks a decree charging the respondent employer, Townhouse T.V. & Appliances, Inc. ('Townhouse'), with unfair labor practices arising out of the subcontracting of its delivery and installation operation after the employees performing that operation informed Townhouse of their desire to join a union. The issues involved are whether substantial evidence supports the Board's finding that Townhouse committed unfair labor practices and whether the Board's remedy is proper.

I.

Townhouse sells and services appliances and television sets from a single store in Chicago, Illinois. From 1959, when the store opened, until September 11, 1973, Townhouse delivered and installed its appliances with its own vehicles operated by its own employees. At the time of the alleged unfair labor practices, Townhouse operated two delivery trucks and employed four fulltime driver-installers and one part-time driver-installer and utility man. From the time it commenced business in 1959 through August of 1973 no union represented any of Townhouse's employees.

On August 30, 1973, the four full-time driver-installers signed cards authorizing the Chicago Truck Drivers, Helpers and Warehouse Workers Union (Independent) ('the Union') to be their exclusive representative for collective bargaining with Townhouse. On September 5, 1973, two field representatives of the Union presented the cards to Michael Moore, president of Townhouse, and requested that the company recognize the Union as collective bargaining representative for the driver-installers and that it sign a collective bargaining agreement. Moore refused both requests and told the Union representatives that he was going to have an outside hauler deliver his merchandise. The Union filed a petition for a Board conducted certification election later that day.

After work that same day, Moore called driver-installers Oliva and Ostrick into his office. He questioned them about their desire to unionize and stated he could not afford to pay the Union's pay scale.

On September 6, 1973, Moore arranged for Rizzo Brothers Haulers to take over the Townhouse delivery operations beginning September 12. The day before Rizzo took over, Moore discharged its four driver-installers. On September 20, Townhouse sold the two trucks formerly used in its delivery and installation service.

The Administrative Law Judge found that Townhouse had violated Section 8(a)(1) of the Act through Moore's interrogation of Oliva and Ostrick and Sections 8(a) (3) and 8(a)(1) through the discharge of the four driver-installers. To remedy these violations he recommended that the Board order Townhouse to bargain with the Union concerning the decision to contract out its delivery-installation work and concerning the economic effects of the decision on the affected employees and to award the affected employees backpay from the date of their discharge to the date the Union and the company bargain either to an agreement or an impasse.

The Board adopted the Administrative Law Judge's findings with respect to Townhouse's unfair labor practices, adding the part-time driver-installer to those employees found to have been discriminatorily discharged, but refused to order the Administrative Law Judge's proposed remedy. In its stead the Board ordered Townhouse to reestablish its delivery operation and reinstate the discharged employees as well as to bargain with the Union and award the employees backpay.

Townhouse challenges both the unfair labor practice findings and the remedial order.

II. Coercive Interrogation

Section 8(a)(1) of the Act proscribes employer conduct which coerces employees in the exercise of their right to form, join or assist labor organizations. As Townhouse points out, the mere interrogation of employees concerning union membership is not per se a violation of the Act. See L. C. Cassidy & Sons, Inc. v. NLRB, 415 F.2d 1358, 1361 (7th Cir. 1969). But the Board may properly find a Section 8(a)(1) violation if, within the context of the interrogation, the questions asked appear to have had a coercive effect on the employees. NLRB v. Sutherland Lumber Co., 452 F.2d 67 (7th Cir. 1971); L. C. Cassidy & Sons, Inc. v. NLRB, supra.

In this case we think the Board properly found the interrogation of Oliva and Ostrick to be coercive. Moore, the president of the company, summoned the employees to his office to tell them he was 'shocked' that they had not come to him before joining the Union and to ask them whether they had signed the Union authorization cards voluntarily. In light of

'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', NLRB v. Gissel Packing Co., 395 U.S. 575, 617, 89 S.Ct. 1918, 1942, 23 L.Ed.2d 547, 580 (1969),

this inquiry into the employees' desire to unionize, conducted by the president of the company in his office, violates Section 8(a)(1) of the Act.

Discriminatory Discharges

It is well settled that an employer violates Sections 8(a)(3) and (1) of the Act by subcontracting part of an integrated business and dismissing the persons employed therein if the action is motivated at least in part by antiunion considerations. NLRB v. National Food Stores, Inc., 332 F.2d 249 (7th Cir. 1964); NLRB v. George Roberts & Sons, Inc., d/b/a The Roberts Press, 451 F.2d 941, 845--946 (2d Cir. 1971). Of course, as Townhouse argues, the converse is true, i.e., an employer does not violate Sections 8(a)(3) and (1) if he makes a S.D.Ind., General Rule 9. business reasons. Jay Foods Inc. v. NLRB, 292 F.2d 317 (7th Cir. 1961); NLRB v. Rapid Bindery, Inc., 293 F.2d 170 (2d Cir. 1961).

In the case at bar the Board was presented with evidence suggesting both business and antiunion motivations for the discharges. Townhouse argued that the decision to subcontract the delivery and installation services was induced by the company's precarious financial condition and was made prior to the Union's request for recognition. The company attempted to show that its financial status was unsound through evidence indicating that its gross profit margin had been below the standard recommended by the National Appliance and Radio-TV Dealer's Association, Townhouse's 1968, §§ 804, 812, 42 U.S.C.A. §§ 3604, 3612; operating losses during 1971 and 1972, the years immediately prior to the discharges. It tried to prove that a decision had been made to subcontract prior to the Union's request for recognition by showing that on August 20 the company president Moore asked David Magee, an officer of the firm which eventually took over Townhouse's delivery and installation activities, when he could provide a truck and crew to do the work. In addition, Townhouse presented evidence of a conversation in August between Moore and a truck dealer regarding the sale of Townhouse's two trucks.

The General Counsel for the Board pointed out that at least one-third of the dealers counseled by the trade association had not maintained the recommended gross profit margin and that Townhouse had not presented the Board a financial statement for 1973, the year the discharges occurred. He further argued that the decision to subcontract was not made until September 6, the day after the Union's request for recognition. In his view, the conversation between Moore and Magee on August 20 was merely another in a series of attempts on Magee's part to take over Townhouse's delivery business. The uncontradicted evidence that no precise date was set for the commencement of the subcontracting at that time adds support to this view of the events. The General Counsel also argued that there was no testimony by anyone inside the company corroborating Moore's statement that the decision had been made prior to September 6. This and Moore's attempt on September 5 to dissuade Oliva and Ostrick from joining the Union also contradict the notion of a prior subcontracting decision.

Adding weight to the Board's position is the Administrative Law Judge's discrediting of much of the testimony presented in Townhouse's behalf. We must defer to this resolution since it is the function of the Administrative Law Judge and the Board to make credibility determinations, not this Court. NLRB v. J. W. Mortell Co., 440 F.2d 455, 457 (7th Cir. 1971); NLRB v. American Casting Service, Inc., 365 F.2d 168, 174 (7th Cir. 1966); NLRB v. National Food Stores, Inc., 332 F.2d 249, 251 (7th Cir. 1964).

Since ascertaining the motivation for the discharges is a factual determination and our review is limited to that of deciding whether substantial evidence on the record considered as a whole supports the Board's finding, Universal Camera Corp. v. NLRB, 340 U.S. 474, 71 S.Ct. 456, 95 L.Ed. 456 (1951), we must affirm the Board since there is substantial evidence on the record to support the Board's view that the subcontracting decision was at least in part motivated by antiunion animus. We may not displace the Board's choice between two fairly conflicting views of the evidence. Ibid., at 488, 71 S.Ct. at 464, 95 L.Ed. at 467.

Remedy

The final question for our consideration is whether the Board's order requiring Townhouse to bargain with the Union, to...