N.L.R.B. v. Southern Health Corp.

• Decision Date: 02 May 1975
• Docket Number: No. 73-2028,73-2028
• Citation: 514 F.2d 1121
• Parties: 89 L.R.R.M. (BNA) 2228, 76 Lab.Cas. P 10,841 NATIONAL LABOR RELATIONS BOARD, Petitioner, v. SOUTHERN HEALTH CORP. d/b/a Corydon Nursing Home, Respondent.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1121

514 F.2d 1121

89 L.R.R.M. (BNA) 2228, 76 Lab.Cas. P 10,841

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. SOUTHERN HEALTH CORP. d/b/a Corydon Nursing Home, Respondent.

No. 73-2028.

United States Court of Appeals, Seventh Circuit.

Argued Sept. 10, 1974.

Decided May 2, 1975.

Elliott Moore, Deputy Associate Gen. Counsel, Thomas Woodley and Alan D. Cirker, Attys., N. L. R. B., Washington, D. C., for petitioner.

Robert L. McLaughlin, Indianapolis, Ind., for respondent.

Before FAIRCHILD, Chief Judge, and PELL and TONE, Circuit Judges.

FAIRCHILD, Chief Judge.

The National Labor Relations Board found that Southern Health Corporation, operator of a nursing home at Corydon, Indiana, refused to bargain with its employees' certified bargaining agent in violation of Sections 8(a)(5) and (1) of the National Labor Relations Act (29 U.S.C. §§ 158(a)(5) and (a)(1)). The company concedes refusal to bargain but challenges the certification.

On May 19, 1972 a consent election was conducted by the Board. The vote was 12 to 9 in favor of the union, with two challenged ballots. On May 26 the company filed objections to certain pre- election conduct of the union which allegedly affected the outcome of the balloting. The Regional Director conducted an administrative investigation of the company's objections and made a report recommending that the objections be overruled. The Board, after considering the company's exceptions, adopted the Regional Director's recommendations and certified the union as exclusive bargaining agent. In the complaint proceeding, the general counsel moved for summary judgment on the pleadings, asserting that all matters presented by the company as justification of its refusal to bargain had been previously raised and rejected in the representation proceeding. In response, the company, for the first time, demanded a hearing with respect to the factual issues raised by its objections to the election. The Board granted summary judgment, concluding that "(a)ll issues raised by Respondent in this proceeding were or could have been litigated in the prior representation proceeding, and the Respondent does not offer to adduce at a hearing any newly discovered or previously unavailable evidence, nor does it allege that any special circumstances exist herein which would require the Board to reexamine the decision made in the representation proceeding." In resisting enforcement the company contends that in the representation proceeding the Board should have denied certification as a matter of law, or at least that the Board should have conducted a hearing into the company challenges.

I.

It is well established that under the statutory scheme of the National Labor Relations Act, the Board is entrusted with the responsibility of conducting elections and of supervising the conduct and actions of the parties therein concerned to insure a free, unfettered exercise of self-determination. See generally, N.L.R.A. Part 9; N.L.R.B. v. A. J. Tower Co., 329 U.S. 324, 328, 67 S.Ct. 324, 91 L.Ed. 322 (1946). This function is essentially administrative in nature, and the courts have, therefore, evidenced reluctance to interfere. "The conduct of representation elections is the very archetype of a purely administrative function, with no quasi about it, concerning which courts should not interfere save for the most glaring discrimination or abuse." N.L.R.B. v. Olson Bodies, Inc., 420 F.2d 1187, 1189 (2nd Cir. 1969), cert. denied, 401 U.S. 954, 91 S.Ct. 966, 28 L.Ed.2d 237 (1971).

Considerable latitude must be given the Board where an election is challenged, even for substantial misrepresentations. N.L.R.B. v. Mar Salle, Inc., 138 U.S.App.D.C. 135, 425 F.2d 566, 570-571 (1970). The Act does not specifically require post-election examination of such matters. Rather, the Board, as an administrative decision designed to effectuate its primary task of insuring an acceptable democratic labor election process, has determined that flagrant and substantial pre-election misconduct may so impair the integrity of the ballot result that invalidation of the election is necessary. Hollywood Ceramics Co., Inc., 140 N.L.R.B. 221, 223 (1962).

In applying this policy, the Board has emphasized that the election environment itself produces many instances of campaign impropriety which employees frequently ignore or discount. Id. Modine Mfg. Co., 203 N.L.R.B. No. 77, 1973, C.C.H. N.L.R.B. (P 25,352) p. 32,667, enforced, 500 F.2d 914 (8th Cir. 1974). Thus, before resorting to the serious remedy of invalidating an election, with its attendant dangers of delay, administrative over-extension, and frustration of the goal of self-determination, the Board relies upon its experience and expertise in labor elections to determine, under all of the peculiar circumstances present, "whether the conduct could reasonably be expected to have an impact on the election." Hollywood Ceramics Co., Inc., supra, 140 N.L.R.B. at 224. See generally, Linn v. Plant Guard Workers, 383 U.S. 53, 60, 86 S.Ct. 657, 15 L.Ed.2d 582 (1965).

The courts have been mindful of the competing considerations present in such a determination and thus deference is given to the Board's expert and considered opinion. In reviewing a Board decision in this area "(t)he substantial evidence test enunciated in Universal Camera Corp. v. N.L.R.B., 340 U.S. 474, 71 S.Ct. 456, 95 L.Ed. 456 (1951), has no applicability. Rather, we must defer to the Board's expertise unless we are prepared to say that the discretion residing in the Board was abused." Follett Corporation v. N.L.R.B., 397 F.2d 91, 95 (7th Cir. 1968).

II. MISREPRESENTATIONS

a. The Union's Power to Fine

On May 8, 1972 company president Ragland wrote to the employees urging votes against the union. In the letter he said, among other things, "Even more shocking is the very great power which unions have to fine and discipline their members and make it stick." He cited examples of fines of employees who went back to work during a strike and of those who crossed a picket line.

On May 17 the organizing committee of the union wrote to the employees challenging as misleading, statements in three of Mr. Ragland's letters. The letter said in part:

"Mr. Ragland stated in his letter to you of May 8 that the Union fined people for crossing a picket line. What Union was he talking about? It was not this Union because under our Union Constitution we cannot fine anyone. If he tells you that it was this Union, then he is lying again. We are going to bring this mistruth and other lies that have been told to the attention of the National Labor Relations Board (U.S. Government)."

The company, in its objection to certification, presented copies of the constitutions of the international and its local unions, pointing out that there is no express prohibition against fines, and each constitution provides for a disciplinary procedure, the international referring to "fining" as one type of discipline, and the local referring to exacting "an appropriate penalty." No assertion was made as to the union's practice in fact with respect to fines for strike breaking or crossing picket lines.

The Regional Director assumed arguendo that the union was authorized by its constitution to fine members for breaking a strike, but concluded that the union's ability to fine its members for breaking a strike was a minor issue and that it is contrary to common experience to consider it a determinative issue in deciding an employee's vote. In addition, he concluded that propaganda of the nature complained of was well within the ability of the electorate to evaluate, considering the company's forewarning to discount union claims and common knowledge of the fact unions do have disciplinary procedures for infractions.

The Board adopted the Regional Director's recommendation. Chairman Miller, concurring separately on this point, said, on the basis of his own observations and experience, "I would exercise great restraint in those matters and would set aside elections only in those relatively rare instances in which a readily ascertainable pattern of the most egregious kind of clearly identifiable misrepresentations permeated the campaign so significantly that one would be compelled to conclude that voters of ordinary intelligence would have been incapable of forming a rational judgment on the basic issue of whether they wish to be represented by a labor organization (and, when appropriate, by which of the competing organizations they would prefer to be represented)."

We are not persuaded that the Board abused its discretion or acted arbitrarily or unreasonably in determining that the misrepresentation concerning the constitutional power to fine did not have a significant impact on the election. N.L.R.B. v. Red Bird Foods, Inc., 399 F.2d 600, 602 (7th Cir. 1968).

b. The Comparison Sheet

In the May 17 letter, the organizing committee referred to a May 11 statement of Mr. Ragland that the union could not give the employees anything, and continued: "I am enclosing a comparison sheet of two places of business whose employees we represent in Corydon, Indiana. Compare the information listed with your present wages and benefits. Wouldn't you like to be making these wages and have these benefits at only a cost to you of $1.25 per week? IT DIDN'T TAKE A STRIKE TO GET THESE WAGES AND BENEFITS AT EITHER OF THESE TWO COMPANIES LISTED ON THE COMPARISON SHEET, EITHER!"

The comparison sheet listed wage rates and benefits in three columns, one headed Corydon Nursing Home and the others headed with the names of other employers in Corydon. At the bottom of the sheet, there appeared: "Don't you think that it is worth a $1.25 per week to receive the Union wages and benefits that the Union Companies of Corydon, Indiana pay their employees?" The company's objections stated there were various misrepresentations, including the fact that the union agreement with one of the employers had not been...