N.L.R.B. v. Mars Sales & Equipment Co.

Decision Date21 July 1980
Docket NumberNo. 79-2082,79-2082
Citation626 F.2d 567
Parties105 L.R.R.M. (BNA) 2138, 89 Lab.Cas. P 12,184 NATIONAL LABOR RELATIONS BOARD, Petitioner, v. MARS SALES & EQUIPMENT CO., Respondent.
CourtU.S. Court of Appeals — Seventh Circuit

Penny Pilzer, N. L. R. B., Washington, D. C., for petitioner.

Joseph A. Yocum, Yocum & Hahn, Evansville, Ind., for respondent.

Before WOOD, Circuit Judge, MARKEY, Chief Judge, * and CUDAHY, Circuit Judge.

HARLINGTON WOOD, Jr., Circuit Judge.

This appeal involves a National Labor Relations Board application for enforcement of its order dated June 13, 1979 issued against Mars Sales & Equipment Company (Company). 1 The Board, substantially adopting the recommended order of the Administrative Law Judge, 2 concluded that the Company violated Section 8(a)(1) of the National Labor Relations Act (Act) by attempting to negotiate directly with Company employees; by soliciting grievances directly from an employee; by requesting information from an employee concerning what contract terms he wanted; by telling Company employees that the Company had discharged employees who engaged in a protected strike; and by telling a non-Union employee that the Company had offered better insurance and retirement benefits, and better wages to the employees if they would get out of the Union. The Board also found that the Company violated Section 8(a)(1) and (3) of the Act by discharging striking employees Neaville and Metzger for engaging in a protected strike. The issues on appeal are whether the Board's findings are supported by substantial evidence, whether the Board's remedy of reinstatement and back pay for Neaville and Metzger is proper, and whether the Board abused its discretion by asserting its jurisdiction in this case.

Background

Mars Sales & Equipment is a small, seven-employee corporation involved in the nonretail sale, distribution, and service of food processing equipment. Located in Centralia, Illinois, the Company serves customers predominantly in two counties in southern Illinois. The Company is family owned and managed. The Company's stock is owned in equal shares by Nathan Rothschild, the Company president, and his wife Beverly, the Company's secretary-treasurer. Nathan, Beverly, and their son, David, constitute the Company's board of directors. David and his brother Jeff also serve as employees of the Company.

Two employees of the Company, Lenard Neaville, a warehouseman, and Victor Metzger, a truckdriver, were members of Teamsters Local Union 50, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America (Union). The Company was under a duty to bargain with the Union with respect to this two-man bargaining unit. The collective bargaining agreement between the two-man unit and the Company expired on May 23, 1978. Neaville and Metzger began what the Company concedes was a protected economic strike on July 12, 1978.

Section 8(a)(1) Violations

The events involved in this case occurred in the months prior to and during the strike of the Company. The ALJ found and the Board agreed that a variety of statements and other conduct of the Company during this period were unfair labor practices in violation of Section 8(a)(1) of the Act. 3 Our inquiry is limited to whether "on the record as a whole there is substantial evidence to support (the Board's) findings. . . . " Universal Camera Corp. v. NLRB, 340 U.S. 474, 491, 71 S.Ct. 456, 466, 95 L.Ed. 456 (1951).

The ALJ and the Board found that the Company prior to the strike violated Section 8(a)(1) by attempting to negotiate directly with employees who were Union members, by soliciting an employee's grievances, and by inquiring and obtaining directly from an employee the contract terms he wanted, at a time when the employees were represented by an exclusive bargaining representative.

The record reveals that some time before the expiration of the agreement, employees Neaville and Metzger informed the Union what they desired in a new contract. Company president, Nathan Rothschild, later told Neaville and Metzger that the requested contract terms were unacceptable. Later still, as Neaville testified, President Rothschild stated to the two employees

that he didn't see why we needed the union, that he didn't like working through a third party, that he would draw up a contract between ourselves and take it to his lawyer and have it certified and notarized and everything, and we would just have our own individual contract, that there was no sense of us paying union dues to the union, the union wasn't doing us any good anyway, and that we wouldn't that he wasn't going to agree with the union, that we was going to agree together first off before we talked to the union.

The record also reveals that President Rothschild told Metzger that he should bring his grievances directly to him before going to the Union. 4 Finally, there was testimony that President Rothschild asked employee Metzger what terms he desired in the contract. Metzger responded that he wanted more money and a retirement plan. This all occurred despite the Company's concession that it was under a duty to bargain with the Union as the employees' exclusive bargaining representative.

This conduct by the Company, which is based on testimony the ALJ and the Board relied on and credited, substantially supports the findings that the employer ignored the Union and negotiated directly with individual employees. It also supports a conclusion that the Company attempted to undermine the Union's role in the grievance procedure and impliedly promised a remedy, independent of Union involvement, for grievances. It is established that such conduct constitutes a violation of Section 8(a)(1), which forbids interference with the right of employees to bargain collectively through representatives of their choice and protects against interference with employees in their organizational efforts. See Medo Photo Supply Corp. v. NLRB, 321 U.S. 678, 684, 64 S.Ct. 830, 833, 88 L.Ed. 1007 (1944) (ignoring bargaining representative); NLRB v. Everbrite Electric Signs, Inc., 562 F.2d 405, 408 (7th Cir. 1977) (bargaining directly with individual employees); NLRB v. Tom Wood Pontiac, Inc., 447 F.2d 383, 384-85 (7th Cir. 1971) (usurping union's role in grievance procedure). Therefore, we grant enforcement of these aspects of the Board's order.

The ALJ and the Board also found that the Company violated Section 8(a)(1) of the Act during the strike by telling employees that the striking employees had been discharged for engaging in the strike and by telling a non-Union employee of the Company that the striking employees had been offered better insurance, wages, and retirement benefits if they would get out of the Union.

The findings of these unfair labor practices were primarily based on the testimony of Diane Speakman, an accounts payable bookkeeper for the Company, who was not a Union member. The record reveals that shortly after the strike began, in letters dated July 18, 1978, the Company informed Neaville and Metzger that they were being released. Soon thereafter, Metzger, while picketing, met Speakman and told her that he had been fired. Nathan and Beverly Rothschild observed this discussion and, as Speakman walked away from Metzger, they asked her what she and Metzger had been talking about. Speakman told them that Metzger had said he and Neaville had been fired. Beverly Rothschild responded, "Yes, they have." On other later occasions Beverly Rothschild repeated, in Speakman's presence, that the striking employees no longer worked for the firm. The record also shows that various members of the Rothschild family, on separate occasions, told Neaville and Metzger or one of them that they had been fired.

Two or three months after the strike began, Speakman commented to David Rothschild that she thought Metzger and Neaville were underpaid. David Rothschild responded that his father had offered them better insurance, wages, and retirement benefits if they would end their Union association.

The ALJ and the Board concluded that this conduct constituted a violation of Section 8(a)(1) because it interfered with employees' rights to engage in a protected strike and it threatened an employment discharge for engaging in union activity. The testimony indicates interference with an employee's decision to become a union member and substantially supports the Board's conclusion of a Section 8(a)(1) violation. Likewise, the statement that Neaville and Metzger were offered better employee benefits if they would terminate their relationship with the Union, indicated to Speakman that she would be better off without the Union. The suggestion that an employee will be better off by not joining a union constitutes an interference with the employee's freedom of choice for or against unionization and thus is violative of Section 8(a)(1). NLRB v. Exchange Parts Co., 375 U.S. 405, 409, 84 S.Ct. 457, 459, 11 L.Ed.2d 435 (1964).

The Company argues that the ALJ's and the Board's crediting of and reliance on the testimony of Speakman, who referred to herself as a "brittle" diabetic, was improper, especially in light of the fact that the Rothschilds denied making the involved statements. This contention is without merit. The ALJ, who directly observed the witnesses and their testimony, specifically credited Speakman's testimony and discredited aspects of the Rothschilds' testimony. Credibility determinations, including assessments of demeanor, are for the ALJ and the Board, not for a reviewing court. Electri-Flex Co. v. NLRB, 570 F.2d 1327, 1331 (7th Cir.), cert. denied, 439 U.S. 911, 99 S.Ct. 280, 58 L.Ed.2d 256 (1978); NLRB v. Townhouse T. V. & Appliances, Inc., 531 F.2d 826, 829 (7th Cir. 1976). Further, here documentary evidence in the form of discharge letters partially corroborates the challenged testimony. We will not disturb the credibility determinations of the ALJ...

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