N.L.R.B. v. State Plating & Finishing Co.

• Decision Date: 03 July 1984
• Docket Number: No. 83-5058,83-5058
• Citation: 738 F.2d 733
• Parties: 116 L.R.R.M. (BNA) 3053, 101 Lab.Cas. P 11,101 NATIONAL LABOR RELATIONS BOARD, Petitioner, v. STATE PLATING & FINISHING COMPANY, Respondent.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 733

738 F.2d 733

116 L.R.R.M. (BNA) 3053, 101 Lab.Cas. P 11,101

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. STATE PLATING & FINISHING COMPANY, Respondent.

No. 83-5058.

United States Court of Appeals Sixth Circuit.

Argued Feb. 21, 1984.

Decided July 3, 1984.

Elliott Moore, Deputy Associate Gen. Counsel, Ellen Farrell (argued), N.L.R.B., Washington, D.C., for petitioner.

Peter J. Kok (argued), Grand Rapids, Mich., for respondent.

Before KENNEDY and WELLFORD, Circuit Judges, and COOK, District Judge. ^*

CORNELIA G. KENNEDY, Circuit Judge.

The National Labor Relations Board ("NLRB" or "Board") seeks enforcement of its order directing State Plating & Finishing Company ("State Plating") to bargain with Local 406 of the Teamsters Union. ¹ State Plating has refused to bargain in order to contest the election which resulted in certification of the union. State Plating contends that the election must be set aside because during the election campaign a union representative and a NLRB agent falsely led the employees to believe that their employer had lied to them about its inability to grant raises before the election. We agree with the employer that the NLRB agent's statements compromised the Board's neutrality and deny enforcement.

I

On September 16, 1980, the union filed a petition for a representation election with the NLRB, and an election was scheduled for November 14, 1980. After the election had been scheduled William Waring, the vice-president of State Plating, was asked by certain employees why they were not receiving raises. Waring replied that under the NLRB's rule he could not give out any raises from the time the union demanded recognition until the election, because if he did it would appear as though he were trying to influence votes. Waring gave this response to several individual employees and groups of employees. In fact State Plating had not announced nor had it scheduled or decided upon any pay raises before the union's petition for certification was filed. It was the company's practice to give individual employees five-cent, ten-cent, fifteen-cent, or twenty-cent an hour raises at various times. Sometimes an employee would receive raises in successive months. The company had given all its employees a ten-cent an hour raise in February 1980. A number of employees had received individual raises after that date; two of them in August shortly before the petition was filed. All employees had been given some wage increase in the fall of 1979. Some received a ten-cent increase in September and another ten cents in October. One received fifteen cents in September and twenty cents in October. One received ten cents in September and ten cents in November. Others received only one increase of five cents, ten cents, or fifteen cents in October. Most, but not all, employees had received some raise at various dates and in varying amounts in the fall of 1978.

The employees brought their concern over the moratorium on raises to union business agent John Winkle. Winkle told the employees that the union had no objection to regularly scheduled pay raises and that the employer could give them if it wanted to. The employees expressed a desire to verify that their employer could indeed grant raises by obtaining an opinion from the NLRB.

Four days before the election, twelve employees met at Winkle's office. ² Winkle placed a call to the NLRB on his speaker phone and reached a NLRB field examiner, Joan Wesa. Wesa had no connection with the State Plating case, but had dealt with Winkle regarding another case. Wesa testified that Winkle told her that some employees had some questions regarding a scheduled election, and that an employee then began asking questions. The employee, Christine Jones, first asked Wesa whether the NLRB was in alliance with the union. Wesa replied that the NLRB was impartial.

Jones then asked Wesa whether her employer could continue giving regularly scheduled raises despite a pending election. No witness was able to relate the exact language used by Wesa in reply. Wesa testified that she told the employees that she didn't like to give such information over the telephone, but that "it was possible for an employer to give a pay raise even though an election is coming." Transcript at 91. Wesa's handwritten notes made during the conversation indicate that her answer was "normally yes--that if they're already due--they should receive them as if there were no election coming." A number of employees testified Wesa had said that they could receive "regular" raises. Wesa was not told and did not ask about State Plating's prior history of granting wage increases or whether any raises had been announced or actually scheduled by the employer.

The conversation with Wesa was widely discussed among all the employees and led many of them to believe that Waring had lied to them about his ability to grant raises. The employees confronted Waring with their belief that he had lied, and would not listen to Waring's attempts to explain his position. The NLRB rejected Waring's request that it further clarify the law regarding wage increases. The union won the election by a vote of sixteen to eleven.

State Plating filed objections to the election, and a hearing on the objections was held before a NLRB Hearing Officer. The Hearing Officer recommended that the objections be overruled. The NLRB adopted the Hearing Officer's report and recommendations, and certified the union. State Plating refused to bargain with the union, and the NLRB now petitions for enforcement of its order requiring State Plating to bargain.

State Plating argues that the certification was improper for three reasons: (1) Wesa's misleading statement regarding a local issue destroyed NLRB neutrality; (2) Winkle abused NLRB processes by implying that the NLRB supported the union's claim that Waring was lying; and (3) Winkle's assertion that State Plating could not give out raises constituted a material misrepresentation. We need reach only the first of these arguments.

The NLRB in its certification order adopted the Hearing Officer's findings, which thus are the findings of the NLRB. The Hearing Officer found that the effect of Wesa's conversation with the employees on the election should be evaluated according to the following standard: "The agent's agreement to answer a question or the actual answer given must neither compromise Board neutrality nor constitute a material misrepresentation of law within the standard of General Knit ... or the agent's conduct may be deemed objectionable interference with a NLRB election." The Hearing Officer further found that the issue of the NLRB's neutrality depended on whether Wesa's "response to a question concerning employee pay increases ... indicated support of any particular party." The Hearing Officer concluded that it did not, because: "Wesa was confronted with a general question, to which the record indicates she gave a general statement of law, not wedded to any factual position." The Hearing Officer also found that Wesa's response was an accurate general statement of the law and not a material misrepresentation.

Resolution of this case depends on whether these findings are supportable under the applicable standard of review.

II

29 U.S.C. Sec. 160(e) provides: "The findings of the Board with respect to questions of fact if supported by substantial evidence on the record considered as a whole shall be conclusive." See also Universal Camera Corp. v. NLRB, 340 U.S. 474, 71 S.Ct. 456, 95 L.Ed. 456 (1951) (substantial evidence test applied to review of NLRB action; standard of review same as under Administrative Procedure Act). The NLRB, however, argues that the substantial evidence test is not the appropriate standard of review in this case. While admitting that factual findings are reviewable under the substantial evidence test, the NLRB argues that the application of its rules to particular facts is the means through which the Board concretely defines the limits of its election policies. The NLRB argues that application of election rules to particular facts therefore should always be reviewed on the basis of whether the Board's election policy, as thus defined, constitutes an abuse of the Board's broad discretion in conducting elections and resolving representation matters. See NLRB v. A.J. Tower Co., 329 U.S. 324, 67 S.Ct. 324, 91 L.Ed. 322 (1946); NLRB v. Wackenhut Corp., 471 F.2d 761 (6th Cir.1972).

This argument was recently rejected by the Seventh Circuit, sitting en banc, in Mosey Manufacturing Co. v. NLRB, 701 F.2d 610 (7th Cir.1983). In Mosey, the court held that "the proper standard of judicial review in cases involving the [NLRB's] application of its election rules to particular facts" was substantial evidence on the record as a whole. 701 F.2d at 611, 615. In rejecting the abuse of discretion standard, the court emphasized "the difference between discretion in formulating rules and discretion in applying them to facts," 701 F.2d at 615, and held that:

the abuse of discretion standard ... is meant for the review of decisions that have one or more of the following characteristics: the factors that are supposed to dominate the decision cannot be evaluated by the reviewing court; the decision is supposed to be made on the basis of subjective rather than objective factors--the individual judgment of the judge or administrator, rather than some articulable legal standard; uniformity of decisions is not important.

701 F.2d at 615. The same conclusion was reached by the Third Circuit in Jamesway Corp. v. NLRB, 676 F.2d 63 (3d Cir.1982). The Jamesway court held that:

there is no indication that the court [in NLRB v. A.J. Tower, 329 U.S. 324, 67 S.Ct. 324, 91 L.Ed. 322 (1946) ] intended to displace the substantial evidence standard of review which under 29 U.S.C. Sec. 160(e) & (f) is to be applied by courts of appeals to the Board's findings of fact. Thus, A.J. Tower Co. accords...