N.L.R.B. v. West Coast Liquidators, Inc., 83-7121

• Decision Date: 09 February 1984
• Docket Number: No. 83-7121,83-7121
• Citation: 725 F.2d 532
• Parties: 115 L.R.R.M. (BNA) 2929, 100 Lab.Cas. P 10,781 NATIONAL LABOR RELATIONS BOARD, Petitioner, v. WEST COAST LIQUIDATORS, INC., Respondent.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 532

725 F.2d 532

115 L.R.R.M. (BNA) 2929, 100 Lab.Cas. P 10,781

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. WEST COAST LIQUIDATORS, INC., Respondent.

No. 83-7121.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Dec. 8, 1983.

Decided Feb. 9, 1984.

Howard E. Perlstein, N.L.R.B., Los Angeles, Cal., for petitioner.

Bryan Rexon, Nelson & Rexon, Los Angeles, Cal., for respondent.

On Application for Enforcement of an Order of the National Labor Relations Board.

Before CHAMBERS and SNEED, Circuit Judges, and CROCKER ^*, District Judge.

SNEED, Circuit Judge:

The National Labor Relations Board applies for enforcement of an order based on its finding that the employer, West Coast Liquidators, Inc., committed an unfair labor practice by refusing to bargain with the certified representative of its employees. West Coast Liquidators contends that the Board abused its discretion by failing to review employee affidavits relied upon in the Regional Director's report and by denying the employer's request for an evidentiary hearing. We agree. Accordingly, we deny enforcement and remand the case for an evidentiary hearing.

I. FACTS

A local of the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America (Union) filed a representation petition with the Board's Regional Office seeking certification as the bargaining representative of certain employees of West Coast Liquidators, Inc. (Employer). The employees of a bargaining unit defined by the Regional Director endorsed the Union in an election held on August 13, 1981. The Employer filed objections to the election claiming, inter alia, that the Union and its agents had made threats to the employees.

The Regional Director conducted an administrative investigation of the Employer's objections. The Employer presented a number of employee witnesses for examination by the Regional Director, and an investigating officer obtained affidavits from these witnesses. In accord with Board policy To obtain judicial review, the Employer refused to bargain with the Union. The Regional Director issued a complaint alleging that the Employer had violated sections 8(a)(1) and (5) of the National Labor Relations Act, 29 U.S.C. Secs. 158(a)(1), (5). Proceedings were transferred to the Board, which granted the General Counsel's motion for summary judgment against the Employer. The Board applied to this court on February 16, 1983, for enforcement of its unfair labor practices order.

the Employer was not present during the preparation of these affidavits, and has not had, and presently does not have, access to them. On September 16, 1981, the Regional Director issued a decision overruling the Employer's objections and certifying the Union as the exclusive collective bargaining representative. The Employer sought review of this decision. It also requested a hearing on its objections and the transmittal to the Board as part of the record all affidavits obtained during the Regional Director's ex parte investigation. Without a transmittal to it of the affidavits, the Board denied the request for a hearing and for review on the grounds that there were no substantial issues warranting review.

II. DISCUSSION

A. Review of Employee Affidavits

An employer does not commit an unfair labor practice by refusing to bargain if the Board abused its discretion in certifying the union. E.g., NLRB v. Advanced Systems, Inc., 681 F.2d 570, 572 (9th Cir.1982). The Employer here argues that the Board abused its discretion by failing to review employee affidavits relied upon by the Regional Director in overruling the Employer's objections to the election.

We previously have held that the Regional Director must forward to the Board all the relevant evidence underlying his report, and that the Board abdicates its statutory responsibility when it adopts the report without reviewing the underlying evidence. E.g., Advanced Systems, 681 F.2d at 573; NLRB v. Consolidated Liberty, Inc., 672 F.2d 788, 790 (9th Cir.1982). This holding recognizes that meaningful review by the Board and this court would be frustrated if the record did not include all evidence relied upon by the Regional Director. Advanced Systems, 681 F.2d at 574; Consolidated Liberty, 672 F.2d at 790. Other circuits have reached a similar conclusion. E.g., Prairie Tank Southern, Inc. v. NLRB, 710 F.2d 1262, 1265 (7th Cir.1983); NLRB v. Klinger Electric Corp., 656 F.2d 76, 82-84 (5th Cir.1981); NLRB v. North Electric Co., 644 F.2d 580, 584 (6th Cir.1981).

The Board notes that since our decisions in Advanced Systems and Consolidated Liberty, it has amended the regulation concerning transmittal of the record to the Board in cases in which no hearing was held. The revised rule provides that the record before the Board in such cases shall include "any documentary evidence, excluding statements of witnesses, relied upon by the regional director in his decision or report." 29 C.F.R. Sec. 102.69(g)(1)(ii) (emphasis added). An objecting party may append to its exceptions copies of affidavits that it timely submitted to the Regional Director. Id. Sec. 102.69(g)(3). The Board maintains that in ruling on the Employer's request for review it had before it all the evidence prescribed by its current rule.

We believe that application of the Board's rule to this case would be unreasonable and inconsistent with Advanced Systems and Consolidated Liberty. ¹ The Board argues that 29 C.F.R. Sec. 102.69 defines the record to include statements by witnesses only if such statements are attached by the objecting party to its request for review. The Employer, however, could not append the affidavits involved here to its objections, because pursuant to Board policy the Employer did not have access to employee affidavits. The Employer did request that the affidavits be transmitted to the Board. Despite this explicit request, the Regional Director failed to transmit and the Board failed to review the affidavits. Instead, the Regional Director summarized the statements of the employees in his report. Appending any affidavits the Employer may have submitted to the Regional Director would reveal nothing with respect to the contents of those the Regional Director failed to transmit to the Board.

It is true that the Board's role in reviewing exceptions to the Regional Director's report is to "determine whether there is a substantial and material dispute between the facts presented in the report and those presented in the exceptions." Advanced Systems, 681 F.2d at 574. The Employer, however, maintains that, because much of the evidence favorable to its contentions is contained in the employee affidavits, review of these affidavits is necessary to decide whether the Regional Director's report is accurate. We agree. Neither the Board nor this court can adequately perform the task of review if affidavits relied upon by the Regional Director are excluded from the record. See, e.g., id.; Prairie Tank Southern, 710 F.2d at 1265.

The Board insists that the need to maintain confidentiality of witness statements justifies its refusal to review the employee affidavits. While we agree that preserving confidentiality is a legitimate concern, we cannot accept the Board's conclusion that affidavits relied upon by the Regional Director must therefore be insulated from review by the Board or the court of appeals. Moreover, we believe that the Board can adopt less sweeping measures that will permit review and protect confidentiality. For example, affidavits can be submitted for review with all information excised that would otherwise identify the affiant or affidavits might be submitted to the Board and this court for inspection in camera. See Klinger Electric Corp., 656 F.2d at 82-83.

We conclude that under the circumstances of this case the Board abused its discretion by refusing to include the employee affidavits in the record for purposes of ruling on the Employer's objections. ²

B. Evidentiary Hearing on Agency Status

The Employer also argues that the Board improperly denied its request for an evidentiary hearing to determine if certain employees were agents of the Union. A hearing on election objections need not be granted unless the objecting party has made a prima facie showing of substantial and material factual issues that would, if true, warrant setting aside the election. E.g., May Department Stores v. NLRB, 707 F.2d 430, 432 (9th Cir.1983). The Board's denial of an evidentiary hearing may be disturbed only for an abuse of discretion. Id.

The Employer contends that employee members of the Union's in-plant organizing committee made threats to other employees. ³ 3] Without holding an evidentiary hearing, the Regional Director found that the members of the organizing committee were not agents of the Union but instead were third parties. This conclusion is significant because in assessing the impact of misconduct on an election, the Board and this court accord less weight to third party misconduct than to misconduct directly attributable to the union or the employer. Id. at 432.

Thus, whether the misconduct alleged by the Employer warrants setting aside...