N.L.R.B. v. Otis Hosp., 76-1138

• Decision Date: 15 November 1976
• Docket Number: No. 76-1138,76-1138
• Citation: 545 F.2d 252
• Parties: 93 L.R.R.M. (BNA) 2778, 79 Lab.Cas. P 11,719 NATIONAL LABOR RELATIONS BOARD, Petitioner, v. OTIS HOSPITAL, Respondent.
• Court: U.S. Court of Appeals — First Circuit

Page 252

545 F.2d 252

93 L.R.R.M. (BNA) 2778, 79 Lab.Cas. P 11,719

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. OTIS HOSPITAL, Respondent.

No. 76-1138.

United States Court of Appeals, First Circuit.

Nov. 15, 1976.

Susan Tepper Papadopoulos, Atty., Bethesda, Md., with whom John S. Irving, Jr., Gen. Counsel, John E. Higgins, Jr., Deputy Gen. Counsel, Elliott Moore, Deputy Associate Gen. Counsel, and Robert Sewell, Washington, D. C., Atty., were on brief, for petitioner.

Julius Kirle, Boston, Mass., for respondent.

Before COFFIN, Chief Judge, CLARK, Associate Justice, U. S. Supreme Court (Ret.), ^* CAMPBELL, Circuit Judge.

LEVIN H. CAMPBELL, Circuit Judge.

The National Labor Relations Board seeks enforcement of its order ¹ issued after respondent was found to have committed unfair labor practices in violation of sections 8(a)(1) and (a)(3) ² of the National Labor Relations Act, 29 U.S.C. §§ 158(a)(1) & (a)(3). The unfair practices stemmed from respondent's withholding of a promised wage increase purportedly for the purpose of pressuring employees in their decision as to unionization.

The Administrative Law Judge and the Board found substantially as follows: Respondent (the "employer") operates a 110-bed private hospital in Cambridge, Massachusetts, for the chronically and terminally ill. Prior to 1975, the employer followed a policy of granting selective wage increases in varying amounts to employees as individuals or in categories. The only exception to this policy was an across-the-board increase granted to all employees in 1972 after the federal wage freeze was lifted. On October 2, 1974, the hospital Administrator, Mr. Hesenius, who exercised complete control over the hospital's operation and had authority to grant wage increases, issued a memorandum to "All Department Heads, Subject: Cost of Living Raise", announcing: "Effective January 1, 1975, there will be a cost of living raise." There was testimony that this memorandum was posted on bulletin boards on all floors of the hospital. The Administrative Law Judge found that Hesenius' use of the term "cost of living" was inadvertent, and that the notice should have read "across-the-board" increase. Mr. Hesenius conceded in testimony that prior to posting the notice he had decided to give "some" wage increase, although the exact amount would be determined only by reviewing the hospital's costs and financial situation at the end of the year in December.

Several weeks after the posting of this notice, in late October, 1974, Massachusetts Hospital Workers, Union Local 880, Service Employees' International Union, AFL-CIO, began an organizing campaign at the Hospital. By November 1, 1974, the union had achieved the necessary support to file a representation petition with the Board, and an election was scheduled for January 8, 1975. The election later was stayed pending review of the unit determination by the Board.

No wage increase was in fact granted on January 1, 1975, as promised, and Nurse's Aide Mary Campbell brought this to the attention of Mr. Hesenius on January 9, 1976. At that time, Hesenius told Campbell "that he did not know what he could do about the raise, . . . that at the time when the notice was posted he had never stated the 'exact amount' and . . . that because of the fact 'that the union was around' he did not know just what he could give." Campbell then inquired whether Hesenius would grant the promised increase if Campbell obtained from the union a letter promising that it would not complain about any increase granted at that time. Hesenius declined the offer, replying that he "just didn't know if it would be a proper thing to do." Having failed to persuade Hesenius to grant the increase, Campbell then asked him whether she could relate to the Hospital's employees Hesenius' two reasons for not granting the increase: the Union's presence and the uncertainty of the amount promised. Hesenius consented to the request. The day following Campbell's conversation with Hesenius, Hesenius called Campbell into his office and asked her whether she knew that he was to receive a letter from the union charging him with committing an unfair labor practice by not granting an across-the-board increase.

From these facts the Administrative Law Judge concluded, with the Board thereafter concurring, that respondent had violated sections 8(a)(1) and (a)(3) of the Act by withholding the announced wage increase. ³ The Judge and Board also concluded that in informing Campbell that the wage increase would not be granted because "the union was around," and in interrogating Campbell about the union's letter, respondent committed additional, separate 8(a)(1) violations.

Withholding a wage increase during a union organizing campaign has been held to violate section 8(a)(1) of the Act under any of three conditions: if the increase was promised by the employer prior to the union's appearance; if it normally would be granted as part of a schedule of increases established by the employer's past practice or if the employer attempts to blame the union for the withholding. G.A.F. Corp. v. NLRB, 488 F.2d 306, 308 (2d Cir. 1973); NLRB v. Dothan Eagle, Inc., 434 F.2d 93, 98 (5th Cir. 1970); NLRB v. Dorn's Transp. Co., 405 F.2d 706, 715 (2d Cir. 1969); NLRB v. Agawam Food Mart, Inc., 386 F.2d 192 (1st Cir. 1967); NLRB v. Longhorn Transfer Serv., Inc., 346 F.2d 1003, 1005-06 (5th Cir. 1965). The common rationale of these cases is that withholding a wage increase in these circumstances has the obvious effect of discouraging employees from exercising their right to organize and bargain collectively. On a similar theory, to grant benefits during a union organizing campaign has been held to violate section 8(a)(1) if, at the time, the employer knew or should have known that a union was organizing or that an election was pending, and if the benefits were granted with the purpose of interfering with the employees' rights to organize. NLRB v. Exchange Parts Co., 375 U.S. 405, 409, 84 S.Ct. 457, 11 L.Ed.2d 430 (1964); D'Youville Manor v. NLRB, 526 F.2d 3 (1st Cir. 1975); NLRB v. Styletek, Div. of Pandel-Bradford, Inc., 520 F.2d 275, 279 (1st Cir. 1975); NLRB v. Gotham Indus., 406 F.2d 1306, 1309 (1st Cir. 1969).

Employers, with some justification, have argued that there is a potential for confusion and unfairness in rules that may make it illegal, on the one hand, to withhold and, on the other hand, to grant, a wage increase. But neither course has been declared illegal per se. It becomes so only if the employer is found to be manipulating benefits in order to influence his employees' decision during the union's organizing campaign. NLRB v. Dothan Eagle, Inc., supra; NLRB v. Dorn's Transp. Co., supra; Armstrong Cork Co. v. NLRB, 211 F.2d 843 (5th Cir. 1954). The Board has said "(A)n employer, in deciding whether to grant benefits while a representation proceeding is pending, should decide the question as he would if a union were not in the picture . . . ." The Great Atlantic & Pacific Tea Co., 166 N.L.R.B. 27, 29 (1967). This, like much advice, is, of course, easier to give than to put into practice. We have observed that to proceed during an election campaign as if the union was not on the scene "is obviously perilous unless the employer can support with very specific facts the reason for granting benefits just then." NLRB v. Styletek, Div. of Pandel-Bradford, Inc., supra, 520 F.2d at 281 n.5. We followed that observation, however, with the statement that "(a) past history of annual wage adjustments on a particular date, or the like, would be an example of clear-cut factual support." Id. By this language, we meant to indicate that under well-defined conditions, where the prospective benefits were already incorporated in the existing terms and conditions of employment, an employer could grant the benefits without fear of violating section 8(a)(1). It follows, conversely, that a refusal to grant the benefits in these circumstances would likely be illegal, since withholding them would constitute a change in existing conditions.

Here, notwithstanding the employer's claim that he withheld the previously announced raise merely for fear of being charged with an unfair labor practice, we think there is substantial evidence to support the Board's conclusion that respondent was otherwise motivated and that he violated the Act. Mr. Hesenius had publicly announced on October 2, 1974, that effective January 1, 1975, there would be what he then termed a cost of living raise. That unequivocal undertaking amounted to a promise that the Board properly found became part of the existing terms and conditions of employment prior to the union's appearance. See NLRB v. United Aircraft Corp., Hamilton Standard Div., 490 F.2d 1105, 1109 (2d Cir. 1973); Pacific Southwest Airlines, 201 N.L.R.B. 647 (1973). The employer's withholding of the increase after January 1, 1975, was, on the same premise, a change in those conditions, in violation of section 8(a) (1). See NLRB v. Dothan Eagle, Inc., supra.

It is true than Hesenius did not indicate how much the increase would be. Respondent argues that this indefiniteness prevented the undertaking from becoming part of the conditions of employment existing when the union came on the scene. But the timing and general applicability of the benefits was indicated, and the notice was posted throughout the institution. Compare The Great Atlantic & Pacific Tea Co., 192 N.L.R.B. 645, 646 (1971), enf'd 463 F.2d 184 (5th Cir. 1972). A clear impression was publicly conveyed to all employees that a wage increase was imminent, and an employee would scarcely expect this employer to renege in such circumstances.

An employer may, of course, change the existing conditions of employment even before an election if the change is separately justified by a legitimate business purpose. NLRB v. Styletek, Div. of Pandel-Bradford, Inc.,supra, 520 F.2d at 280; G.A.F. Corp. v....