National Labor Rel. Bd. v. Houston Chronicle Pub. Co.

• Decision Date: 09 April 1954
• Docket Number: No. 14543.,14543.
• Citation: 211 F.2d 848
• Parties: NATIONAL LABOR RELATIONS BOARD v. HOUSTON CHRONICLE PUB. CO.
• Court: U.S. Court of Appeals — Fifth Circuit

211 F.2d 848 (1954)

NATIONAL LABOR RELATIONS BOARD v. HOUSTON CHRONICLE PUB. CO.

No. 14543.

United States Court of Appeals Fifth Circuit.

April 9, 1954.

A. Norman Somers, Asst. Gen. Counsel, David P. Findling, Associate Gen. Counsel, George J. Bott, General Counsel, Bernard Dunau and Rosanna Blake, Attys., N. L. R. B., Washington, D. C., for petitioner.

Frank A. Liddell, W. O. Huggins, Jr., Charles R. Vickery, Jr., Tom M. Davis, Houston, Tex., Liddell, Austin, Dawson & Huggins, Houston, Tex., of counsel, for respondent.

Before HUTCHESON, Chief Judge, and BORAH and RIVES, Circuit Judges.

RIVES, Circuit Judge.

The National Labor Relations Board, pursuant to the provisions of Section 10(e) of the National Labor Relations Act, as amended,¹ petitions the court for enforcement of its decision and order reported at 101 N.L.R.B. No. 198.

The unfair labor practices found by the Board center about a change made by the respondent on October 20, 1950 in its method of distributing its newspaper, The Houston Chronicle, in the City of Houston, Texas. Respondent had theretofore distributed its papers through a City Circulation Department.² The city was divided for distribution purposes into six zones, to each of which was assigned an employee designated as a "supervisor". Below the supervisors were 48 employees known as "district managers" who delivered the papers to carrier boys for distribution to subscribers, were responsible for collections, and assisted the carriers in soliciting new accounts.³ Other employees included an assistant manager, a chief clerk, a dock foreman, five rack men, three dock boys, two dealer boys, two street salesmen, fourteen office clerks, a stenographer and eleven crew managers.

On October 20, 1950, respondent abolished its City Circulation Department and instituted an independent contractor system of distribution. It discharged most of the employees in its circulation department and started distributing its papers through 49 independent contractors of whom 43 were former district managers and 6 former supervisors.

The Board found that the respondent's change in its method of distribution and its discharge of 59 circulation department employees in connection with such change were motivated by a desire to avoid its statutory obligation to bargain with the American Newspaper Guild, C. I. O. Local 113, herein called the union; that the respondent thereby violated Sec. 8(a)(1) of the Act in that it abridged the employees' right to bargain collectively; that the respondent also violated Sec. 8(a)(3) of the Act in that the discharges it effected constituted discrimination in employment to discourage union membership. The Board further found that the respondent threatened its employees that it would change its method of distribution if the employees organized a union, warned them of other reprisals for engaging in union activity, interrogated the employees concerning their union sympathies and activities, and otherwise obtained information concerning such activities. The Board found that this conduct was independently violative of Sec. 8(a)(1) of the Act and furnished additional evidence of an illegal motivation underlying respondent's change in its method of distribution. Finally, the Board found that respondent refused to bargain collectively with the union upon request, in violation of Sec. 8(a) (5) of the Act.

The respondent answers that the order of the Board is not supported by substantial evidence on the record considered as a whole, and that the enforcement of the order would not serve to effectuate the policies of the National Labor Relations Act, as amended, but would have the opposite effect.

By way of intervention, 42 of the 49 independent contractors now handling the circulation of the newspapers, 32 of whom were employed by the respondent as district managers prior to October 20, 1950, petition the court not to require the re-establishment of the district manager system of distributing newspapers.

The questions presented for decision are: (1) whether substantial evidence on the record considered as a whole supports the Board's finding that the respondent effected its change to the independent contractor system of distribution, and discharged 59 employees in connection with that change, in order to defeat the employees' exercise of their organizational rights and to avoid its obligation to bargain with the union; (2) whether the Board properly found that respondent violated Sec. 8(a) (1) of the Act by threatening its employees because of their union activities and by interrogating them concerning these activities; (3) whether the Board properly found that respondent violated Sec. 8(a) (5) of the Act by refusing to bargain with the union on request; and (4) whether the Board's order is valid and proper.

(1) The primary and principal question presented is whether substantial evidence on the record considered as a whole supports the Board's finding that respondent's change in its distribution method and its discharge of the 59 employees were illegally motivated. Respondent's officers responsible for that change were its Executive Vice-President J. H. Butler and its City Circulation Manager Edgar B. Anderson; they were the only witnesses who actually knew the motive or motives for the change. Each of them testified directly and positively that the change was made for economic reasons.⁴ The petitioner vigorously attacks the adequacy of the business reasons advanced by respondent.⁵ The respondent, in turn, seeks to answer the petitioner's attack, but we think that we have followed this phase of the controversy far enough. The petitioner concedes that respondent may suspend its operations or change its business methods so long as respondent's change in operations is not motivated by the illegal intention to avoid its obligations under the Act. See Martel Mills Corp. v. N. L. R. B., 4 Cir., 114 F.2d 624; N. L. R. B. v. Union Pacific Stages, 9 Cir., 99 F.2d 153; N. L. R. B. v. Grace Co., 8 Cir., 184 F.2d 126; 152 A.L.R. 149, et seq. The issue is not whether the business reasons advanced by the respondent were good or bad, but whether the respondent actually in good faith had business motives for the change, or whether the change was illegally motivated. The Board reached the conclusion that respondent's real motive was to defeat concerted activity and the organization of a union local by its employees; and this it inferred not only from what it considered the weakness of respondent's explanation of its economic reasons, but from such things as (a) the sequence of events, (b) warnings and interrogations of the employees, (c) the precipitate manner of accelerating the change, and (d) background evidence claimed to show an anti-union animus of respondent.

(a) Petitioner in its brief sets forth the sequence of events as follows:

"On October 9, 1950, department head Anderson agreed to meet with the men on October 11 to discuss their request for a wage increase; on October 10, informed of the men\'s request, respondent\'s vice-president wrote a memorandum to his department head `to consider the individual contractor system * * * because it might be, that the time is approaching that we will be forced into changing our system\'; on October 11, the department head met with the men and read the vice-president\'s memorandum to them. Between October 11 and 16, the employees began union organization, held two union meetings, and the employee response was great; on October 16, respondent\'s vice-president decided to change to the independent contractor system `as quickly as possible\', by November 1 if feasible but no later than November 15, and the employees were so informed. On October 16, the Union requested that respondent bargain with it, the request was repeated on October 19, and a meeting was arranged on that day for the morning of October 21; on October 19, the same day as the Union requested bargaining, respondent decided to accelerate the November 1 change-over date, put the independent contractor system into effect on October 20, and the reason for the acceleration was that the Union\'s representative `was going to ask respondent to bargain with him for a unit that included district managers\' and `we don\'t want to bargain with him\'. On October 21, when the Union\'s representative met with respondent pursuant to their October 19 agreement, respondent refused to bargain with him for any unit of employees which included the district managers on the ground that they were no longer in its employ."

The respondent calls attention to the following additional "facts found by the Board, in chronological order, material on `sequence of events':

"In August, 1950 (two months before any claimed concerted activity or union organizational activity) Respondent\'s circulation manager, Mr. Anderson, met with Mr. Nogle, circulation manager of the Port Arthur News which employed the `Independent Contractor\' system, and the savings, efficiency and productivity features of that system were detailed to Anderson. At the conclusion of the meeting Anderson told Nogle that he (Anderson) was going to put the `Independent Contractor\' system into effect as soon as he could.

"Anderson made an investigation of the Independent Contractor system prior to October, 1950. The desirability of such change was discussed by Respondent\'s officers during the month of September, 1950, and serious consideration given such change at that time because of Respondent\'s loss of comparative lead in circulation and rise in operating costs, but it was decided to await the publisher\'s statement for the six months period ending September 30, 1950, so that the exact additional figures would be available and to make a definite decision at that time as to the change to the new circulation system.

"On October 9, 1950, following Anderson\'s return from vacation, Butler called him in, said he had seen the September 30th

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