N.L.R.B. v. Mosey Mfg. Co., Inc., 78-1565

• Decision Date: 27 March 1979
• Docket Number: No. 78-1565,78-1565
• Citation: 595 F.2d 375
• Parties: 100 L.R.R.M. (BNA) 3134, 85 Lab.Cas. P 11,215 NATIONAL LABOR RELATIONS BOARD, Petitioner, v. MOSEY MANUFACTURING CO., INC., Respondent.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 375

595 F.2d 375

100 L.R.R.M. (BNA) 3134, 85 Lab.Cas. P 11,215

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. MOSEY MANUFACTURING CO., INC., Respondent.

No. 78-1565.

United States Court of Appeals, Seventh Circuit.

Argued Jan. 22, 1979.

Decided March 27, 1979.

Linda J. Dreeben, N.L.R.B., Washington, D.C., for petitioner.

Leland B. Cross, Jr., Indianapolis, Ind., for respondent.

Before PELL, Circuit Judge, MARKEY, Chief Judge, ^* and WOOD, Circuit Judge.

MARKEY, Chief Judge.

The National Labor Relations Board (Board) petitions for enforcement of its order issued against Mosey Manufacturing Co., Inc. (Company) on February 13, 1978. 234 N.L.R.B. No. 138. The order held the Company in violation of §§ 8(a)(1) and 8(a)(5) ¹ of the National Labor Relations Act, as amended, 29 U.S.C. §§ 151 Et seq. (1976) (Act), for refusing to bargain with the Eastern Indiana District Council of Carpenters a/w United Brotherhood of Carpenters and Joiners of America, AFL-CIO (Union), the certified exclusive bargaining representative of the Company's employees. We remand.

Background

The Company refused to bargain, but asserts that the Union was improperly certified because the representation election was improperly conducted, objecting to (1) Union misrepresentations, (2) Union threats, (3) an improper Union promise of benefit, and (4) improper conduct of a Board agent. ²

The election was conducted in response to a Union representation petition filed with the Board on April 15, 1977. The Regional Director conducted a secret ballot election on June 10, 1977, among the Company's production and maintenance employees. Of 72 eligible voters, two did not vote, and one ballot was void. The balloting was 35 for the Union and 34 against. There were no challenged ballots.

On June 17, 1977, pursuant to timely filing of the Company's objections, an investigation was conducted, all parties being afforded an opportunity to submit evidence.

On July 20, 1977, the Regional Director overruled all Company objections and certified the Union as exclusive bargaining representative. The Board denied review of the Regional Director's decision, on the ground that no substantial issues warranting review had been raised.

Looking to eventual review of the representation proceeding in this court under § 10 of the Act, the Company refused to bargain. Pursuant to an unfair labor practice charge filed by the Union, the Board's General Counsel issued a formal complaint against the Company on November 15, 1977. In its answer, the Company repeated its objections. The Board's General Counsel moved for summary judgment, alleging that all issues were or could have been raised in the representation proceeding.

The Board, in its February 13, 1978 decision and order, granted the motion for summary judgment because the issues were or could have been litigated in the representation proceeding, and the Company had neither offered to adduce newly discovered, previously unavailable evidence, nor alleged special circumstances requiring the Board to reexamine its refusal to review the Regional Director's decision.

The order sought to be enforced requires that the Company cease and desist from refusing to bargain and from interfering with employees in the exercise of the rights guaranteed them in § 7 of the Act. It also requires, as affirmative action, that the Company bargain with the Union and post appropriate notices with respect to such bargaining.

OPINION

Whether campaign misrepresentations constitute grounds for setting aside a representation election is an area of labor law recently subjected to great flux. For many years the standards were those articulated by the Board in Hollywood Ceramics Co., 140 N.L.R.B. 221 (1962). When this court last addressed the issue, it applied the Hollywood Ceramics guidelines, summarizing them:

Under this test, an election should be set aside if there is (1) a misrepresentation of a material fact involving a substantial departure from the truth, (2) made by a party with special knowledge of the truth, (3) communicated so shortly before the election that the other party has insufficient time to correct it, and (4) involving facts about which the employees are not in a position to know the truth. The misrepresentation need not be deliberate so long as it may reasonably be expected to have significant impact on the election.

Peerless of America, Inc. v. NLRB, 576 F.2d 119, 123 (7th Cir. 1978).

On April 8, 1977, in Shopping Kart Food Market, Inc., 228 N.L.R.B. 1311 (1977), ³ a Board majority overruled Hollywood Ceramics and its standards, which had long been an object of scholarly criticism. ⁴ The Shopping Kart majority essentially held that elections would no longer be set aside solely because of misleading campaign statements, unless deceptive practices improperly involving the Board and its processes, or the use of forged documents, were present. Under the Shopping Kart standard, the Board would no longer concern itself with the truth or falsity of campaign statements, but would leave to the employee-electorate the sorting of truth or falsity from all statements made in an election campaign. At the time of the present election, and until well after the Board's February 13, 1978 decision and order, the applicable standards respecting misrepresentations were those of Shopping Kart.

However, the Shopping Kart standards were shortlived. On December 6, 1978, the Board decided General Knit of California Inc., 239 N.L.R.B. No. 101 (1978). In General Knit, the Board abandoned Shopping Kart, as inconsistent with its responsibility to insure fair elections, and returned to the standards of Hollywood Ceramics. ⁵

Because General Knit was decided after briefs had been filed here, the petition assumes a distorted posture, both parties having abandoned at oral argument the principal thrust of their briefs, which had been based on Shopping Kart.

Counsel for the Board contended at oral argument that this court should apply the Hollywood Ceramics standards, asserting that such application would not be de novo here because the Regional Director had applied both Shopping Kart and Hollywood Ceramics standards. Counsel for the Board also contended that our application of Hollywood Ceramics standards should not be viewed as denying the Company adequate opportunity to fully present its case under those standards, because the Company could have insisted on application of Hollywood Ceramics standards before the Board, in refutation of what the Regional Director said with respect thereto.

The Company's counsel also contended at oral argument that Hollywood Ceramics standards should be applied by this court. Though counsel asserted that a remand would be proper, the Board having remanded to the Regional Director in General Knit, ⁶ counsel further contended that remand is not required on this record. The present record manifestly reveals, says counsel, that an effective opportunity to reply to misrepresentations before the election, a Hollywood Ceramics standard, was not available. Counsel argued also that, because the Company had had no opportunity to fully pursue Hollywood Ceramics issues before the Board, the unfair labor practice proceeding having been before the Board only on motion for summary judgment, there should be no enforcement of the Board's order without affording the Company that opportunity.

We decline the joint suggestion that we apply Hollywood Ceramics standards ⁷ and hold that a remand to the Board is necessary.

For a reviewing court to substitute counsel's rationale or its own discretion for that of the Board, would be incompatible with an orderly process of judicial review. NLRB v. Metropolitan Life Insurance Co., 380 U.S. 438, 444, 85 S.Ct. 1061, 13 L.Ed.2d 951 (1965); SEC v. Chenery Corp., 332 U.S. 194, 196, 67 S.Ct. 1575, 1760, 91 L.Ed. 1995 (1947). That process would be further subjected to disorder, were a court to become embroiled in the shifting currents of the Board's effort to settle upon its standards applicable to the effect of campaign misrepresentations. "(T)he Board has been entrusted with broad discretion in determining the nature and extent of pre-election campaign propaganda that will be allowed, and thus considerable deference must be given to the Board's expertise in this area." Peerless of America, Inc. v. NLRB, supra at 122 (footnote omitted). See Follett Corp. v. NLRB, 397 F.2d 91, 94 (7th Cir. 1968). That the Board may have on-again, off-again standards, whatever the effect thereof upon the concept of "expertise," would not warrant the court in itself applying standards not actually applied by the Board.

At the time of the election here at issue and at the time of the proceedings before the Regional Director and the Board, the legal standards applicable to misrepresentations were those of Shopping Kart. There is no indication that Hollywood Ceramics was briefed before either the Regional Director or the Board. Certain factual issues having a significant impact under Hollywood Ceramics, e. g., the extent of departure from the truth and opportunity for effective reply, are of little or no moment under Shopping Kart. Our reading of the decision and order of both the Regional Director and the Board indicates a lack of full development of Hollywood Ceramics issues. ⁸

The sole reference in the Board's decision and order to Hollywood Ceramics standards appears in its comment that "(t)he Regional Director relied on Shopping Kart Food Market Inc., 228 NLRB No. 190 (1977), but noted that he would not reach a different result under Hollywood...