N.L.R.B. v. Arrow Elastic Corp.

• Decision Date: 06 April 1978
• Docket Number: No. 77-1395,77-1395
• Citation: 573 F.2d 702
• Parties: 98 L.R.R.M. (BNA) 2004, 83 Lab.Cas. P 10,515 NATIONAL LABOR RELATIONS BOARD, Petitioner, v. ARROW ELASTIC CORPORATION, Respondent.
• Court: U.S. Court of Appeals — First Circuit

Page 702

573 F.2d 702

98 L.R.R.M. (BNA) 2004, 83 Lab.Cas. P 10,515

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. ARROW ELASTIC CORPORATION, Respondent.

No. 77-1395.

United States Court of Appeals, First Circuit.

Argued Jan. 3, 1978.

Decided April 6, 1978.

David A. Fleischer, Atty., Washington, D. C., with whom John S. Irving, Gen. Counsel, John E. Higgins, Jr., Deputy Gen. Counsel, Carl L. Taylor, Associate Gen. Counsel, Elliott Moore, Deputy Associate Gen. Counsel, and Michael S. Winer, Atty., Washington, D. C., were on brief, for petitioner.

Jason Berger, Boston, Mass., with whom Snyder, Tepper & Berlin, Boston, Mass., was on brief, for respondent.

Before COFFIN, Chief Judge, CAMPBELL and BOWNES, Circuit Judges.

BOWNES, Circuit Judge.

The chief issue in this case is whether the Board's finding that the employer violated section 8(a)(1) of the National Labor Relations Act, 28 U.S.C. § 158(a)(1), by announcing the establishment of a pension plan under circumstances calculated to influence the outcome of a pending representation election is supported by substantial evidence and correct as a matter of law. ¹

Arrow Elastic Corporation of Springfield, Massachusetts, is one of four companies with common ownership and similar employee benefits engaged in the manufacture of elastic webbing and related products. International Ladies' Garment Workers' Union, AFL-CIO, began an organizational campaign at the company's plant in early 1976 which culminated in an election on May 6.

On May 4, 1976, the president of the company, Robert Kingsbury, gave separate speeches to the employees on each of two shifts informing them that a fixed pension plan would be added to the existing profit-sharing program, that there would be a general wage increase of fifteen cents per hour effective August 1, and that the employees would receive an additional holiday.

Kingsbury stated candidly, "I spoke to the people because there was going to be a union election and I wanted to win it."

The record discloses that the assistant plant manager, Kasimierz Moszynski, was told at a January executive meeting to spread the word that there would be an extra holiday and pension plan. He was asked to find out from the employees what day they wanted for a holiday, but was given no details of the pension plan except that the company was working on it. "Kaz" told approximately twelve or fourteen employees of the two new benefits with the understanding that they would tell others, many of whom did not speak English. There is no question but that the method of dissemination was generally effective, and, with regard to the extra holiday, the administrative law judge so held. ²

At the outset of the hearing before the administrative law judge, the General Counsel offered three stipulations:

One, the Employer has a policy of granting an annual wage increase on or about August 1 of any given calender (sic ) year. This policy was promulgated in 1974. In August of 1974 employees received an increase of 10cents per hour. In August of 1975 employees received an increase of 10cents per hour and in August of '76 employees received an increase of 15cents per hour.

(Two,) the Employer began developing a pension program which included a life insurance benefit in 1975. The decision to implement said benefit was made in 1975. Said decision was made without knowledge of union activity.

(Three,) the Employer decided to grant a ninth paid holiday in January, 1976. The decision to grant said holiday was made without knowledge of union activity.

The Board found that the announcement of the wage increase and the additional holiday did not violate the Act because the company had an established policy of granting pay increases on August 1 of every year and because most of the employees became aware in January that there would be an additional holiday.

Arrow's first line of attack is that the stipulation foreclosed any determination by the administrative law judge and the Board that the pension plan was not predetermined. We do not read the stipulation to mean that the pension plan had been finalized in 1975. Under the circumstances, the Board had a duty to determine the status of the pension program in January and May of 1976. The stipulation meant what it said; the employer had decided in 1975 to implement a life insurance benefit as part of a pension program. Moreover, as we shall develop later, we do not think the Board's finding rises or falls solely on the question of when the plan was determined.

Just recently in NLRB v. South Shore Hospital, 571 F.2d 677 (1st Cir. 1978), we reiterated the general rule that promises of benefits made by the employer just prior to a Board's certification election for the purpose of influencing the election are unfair labor practices under section 8(a)(1). ³ See NLRB v. Exchange Parts Co., 375 U.S. 405, 84 S.Ct. 457, 11 L.Ed.2d 435 (1964); D'Youville Manor v. NLRB, 526 F.2d 3 (1st Cir. 1975); NLRB v. Styletek, 520 F.2d 275 (1st Cir. 1975); NLRB v. Sandy's Stores, Inc., 398 F.2d 268, 270 (1st Cir. 1968); Casey Manufacturing Company and United Shoe Workers of America, AFL-CIO, 167 NLRB 89 (1967).

In this case Arrow contends that it comes within an exception for "pre-determined" benefits and cites Schwab Foods, Inc., 223 NLRB 394, 397-398 (1976); Big G Supermarket, 219 NLRB 1098, 1108 (1975); Domino of California, Inc., 205 NLRB 1083, 1086-1087; Sanford Finishing Corp., 175 NLRB 366 (1969); Southbridge Sheet Metal Works, 158 NLRB 819 (1966), aff'd, 380 F.2d 851 (1st Cir. 1967); and NLRB v. Tommy's Spanish Foods, Inc., 463 F.2d 116, 119 (9th Cir. 1972). On analysis, we find that this line of cases is distinguishable on the grounds that the benefits there were "pre-determined" in the sense that they were already existing or that the employers had made a binding commitment to put the benefits into effect regardless of the outcome of the election. ⁴ Here, Arrow did not become legally committed to a pension plan until September 10, 1976, when its Board of Directors adopted the specific program by executing an agreement with the carrier. The formal adoption of the pension program was not, as Arrow suggests, only a paper formality; until the plan was signed, Arrow was free to abandon its program at any time or to alter the provisions of it. No specific provisions of the program had been announced by May 4. Furthermore, even assuming the details were in esse and predetermined before May 4, the Board could infer from the company's failure to reveal any of the details until election eve, that it was deliberately delaying the announcement in order to influence the election. Predetermination alone is not determinative, the timing of the announcement must also be considered. In Styletek, supra, 520 F.2d at 280, we noted:

Wage increases and associated benefits may be well warranted for business reasons; still the Board is under no duty to permit them to be husbanded until right before an election and sprung on the employees in a manner calculated to influence the employees' choice.

In Exchange Parts Co., supra, 357 U.S. at 409-410, 84 S.Ct. at 460, the Court said:

The danger inherent in well-timed increases in benefits is the suggestion of a fist inside the velvet glove. Employees are not likely to miss the inference that the source of benefits now conferred is also the source from which future benefits must flow and which may dry up if it is not obliged. The danger may be diminished if . . . the benefits are conferred permanently and unconditionally. But the absence of conditions or threats pertaining to the particular benefits conferred would be of controlling significance only if it could be presumed that no question of additional benefits or renegotiation of existing benefits would arise in the future . . ..

The employer argues that, because the employees were informed of the pension...