National Labor Relations Bd. v. Intersweet, Inc.

• Decision Date: 17 September 1997
• Docket Number: No. 96-3528,96-3528
• Citation: 125 F.3d 1064
• Parties: 156 L.R.R.M. (BNA) 2332, 134 Lab.Cas. P 10,079 NATIONAL LABOR RELATIONS BOARD, Petitioner, and Union of Needletrades Industrial and Textile Employees, Local 76, Intervening Petitioner, v. INTERSWEET, INCORPORATED, Respondent.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1064

125 F.3d 1064

156 L.R.R.M. (BNA) 2332, 134 Lab.Cas. P 10,079

NATIONAL LABOR RELATIONS BOARD, Petitioner and Union of Needletrades Industrial and Textile Employees Local 76, Intervening Petitioner, v. INTERSWEET, INCORPORATED, Respondent.

No. 96-3528.

United States Court of Appeals Seventh Circuit.

Argued May 27, 1997.

Decided Sept. 17, 1997.

Jill A. Griffin, Richard A. Cohen (argued), National Labor Relations Board, Contempt Litigation Branch, Washington, DC, Elizabeth Kinney, National Labor Relations Board, Chicago, IL, Aileen A. Armstrong, Frederick Havard, National Labor Relations Board, Appellate Court, Enforcement Litigation, Washington, DC, for Petitioner.

Mark L. Juster, Joseph M. Gagliardo, Michael Klupchak, Jeffrey S. Fowler (argued), Marc J. Siegel, Jill O'Brien, Laner, Muchin, Dombrow, Becker, Levin & Tominberg, Chicago, IL, for Respondent.

William A. Widmer, III, Martin P. Barr (argued), Carmell, Charone, Widmer, Mathews & Moss, Chicago, IL, for Intervening Petitioner.

Before ROVNER, DIANE P. WOOD, and EVANS, Circuit Judges.

ILANA DIAMOND ROVNER, Circuit Judge.

In January 1993, sugar wafer manufacturer Intersweet, Inc. responded to a union organizing effort in its plant by terminating its entire workforce. It subsequently refused to rehire most of the union cardsigners and chose inexperienced workers to replace them. To make matters worse, the company's management questioned workers about their union affiliation and told them that the terminations were related to union activity. The International Ladies' Garment Workers' Union Local 76, AFL-CIO ("the Union"), ¹ filed a complaint with the National Labor Relations Board ("NLRB"), which resulted in a seven-day hearing conducted in the summer and fall of 1994. The administrative law judge found that Intersweet had violated sections 8(a)(1) and (3) of the National Labor Relations Act (29 U.S.C. § 158(a)(1) and (3)), and recommended that the Board impose a bargaining order of the type authorized by the Supreme Court in NLRB v. Gissel Packing Co., 395 U.S. 575, 89 S.Ct. 1918, 23 L.Ed.2d 547 (1969). Intersweet, Inc. and International Ladies' Garment Workers' Union Local 76, AFL-CIO, 321 NLRB 1, 1996 WL 196549 (1996). On April 22, 1996, after considering Intersweet's exceptions, the Board upheld the ALJ's decision and adopted her recommendations. The Board now petitions this court for enforcement of its order. Intersweet does not contest the Board's finding of unfair practices, but objects to the Gissel bargaining order that the Board imposed, arguing that the order was no longer appropriate because of changed circumstances. We disagree and grant the Board's petition for enforcement.

I. Background ²

After founding Intersweet, Inc., in 1974, owner Julius Meerbaum served as president of the company until 1986, when he retired and moved from Illinois to Florida. From that time until 1992, Julius was not involved in the company's day-to-day operations, although he retained ultimate decisionmaking authority. Daily management was taken over by Julius' son and son-in-law, John Meerbaum and David Sabin. In 1992, when John Meerbaum decided to reduce his workload, Julius once again became active in management. Focusing his efforts largely on production, Julius spent about ten days each month at the plant. In addition to the Meerbaums and Sabin, Intersweet's management team in 1993 included front-line supervisors Ignacio Alfonso Marquez and Jose Diaz, the only managers able to communicate with the company's mostly Spanish-speaking workforce.

In December 1992 and January 1993, the Union conducted three organizational meetings with Intersweet workers and distributed cards authorizing union representation for employees to sign. By late January, nineteen of the company's thirty-one employees had signed union cards. On January 26, 1993, Julius Meerbaum decided to shut down the plant and terminate all of its employees. He called Sabin from Florida with the decision, which was implemented that same morning by Sabin, Diaz and Marquez. With wafers in mid-production, workers were told to leave the plant at once because the company had run out of funds to pay their wages. On January 27, the very next day, Julius instructed Diaz to recall ten of the thirty-one employees who had been terminated. The plant was to be operated at less than its full capacity, and according to Intersweet, the recalled employees were those most efficient at operating the machines that were still to be used. Nonetheless, only two of those recalled, Fermin Rivera and Sergio Roman, had signed union cards. In addition, neither Rivera nor Roman had attended the union meetings, and Rivera had denied awareness of the union campaign when Diaz had asked him about it several weeks earlier.

When the plant resumed operations on February 2, the smaller workforce was required to work fifty or sixty hours per week instead of the forty hours it had formerly worked. The company also increased the speed of its machines and automated some tasks that had previously been manual. Two additional employees, both non-signers, were recalled during February. In March, the company advertised job opportunities in a Polish-language newspaper and hired two Polish-speaking employees who were soon fired because of communication problems. The company then began to advertise in Spanish-language papers, and on March 17, it hired eleven Mexican employees who had never before worked for the company. During the remainder of March and early April, the company continued to advertise job openings in Spanish-language papers and hired a total of fifteen new employees. Most members of the newly-comprised workforce put in many overtime hours.

The violations of section 8(a)(1) arose from the conduct of Diaz toward Rivera and Roman, the two card-signing employees who were recalled after the shutdown. In mid-January, before the en masse firings, Diaz asked Rivera whether he knew about the Union, and although Rivera had already signed his union card, he replied that he did not. In mid-February, after the shutdown and reopening of the plant, Roman heard Diaz tell Marquez that the terminated employees were all "pendejos" (idiots) because Intersweet management had been aware of their union activities. Roman then asked Diaz why the employees had been discharged and Diaz responded that "the Union wasn't good for the Company, it wouldn't benefit them." Rivera also overheard this conversation. Later, after Intersweet had begun hiring new workers, Rivera asked Diaz why the company was not rehiring its former employees instead, and Diaz responded that they were not being brought back because of their union activity. Rivera subsequently overheard a conversation between Marquez and Diaz, conducted while he was within their sight. Marquez suggested to Diaz that they bring back some of the former employees to train the newcomers and Diaz responded, "no, they were not coming back here to work because they were in the Union." Finally, after the new workers had been hired in mid-March, Roman complained to Diaz that they were making many mistakes and suggested that the old workers should be recalled to replace them. Diaz replied by saying, "[t]hey weren't going to call them back again because of the Union."

Based on these factual findings, the ALJ found that Intersweet had committed "outrageous unfair labor practices ... whose coercive effects cannot be eliminated by the application of traditional remedies...." 321 NLRB at 19 (citation and internal quotation omitted). She therefore recommended imposition of an order requiring Intersweet to bargain with the union in the absence of an election. The Board affirmed the ALJ's order after considering Intersweet's arguments that it was no longer necessary because of a change in circumstances. Intersweet reiterates those arguments here, but we are also unpersuaded and grant the Board's petition for enforcement of its order.

II.

In considering the Board's petition for enforcement, we respect its "broad discretion to devise remedies that effectuate the policies of the Act, subject only to limited judicial review." America's Best Quality Coatings Corp. v. NLRB, 44 F.3d 516, 520 (7th Cir.), cert. denied, 515 U.S. 1158, 115 S.Ct. 2609, 132 L.Ed.2d 853 (1995) (internal quotation omitted). We therefore review the Board's decision with deference and will interfere only if the Board's order reflects an abuse of its discretion. NLRB v. Q-1 Motor Express, Inc., 25 F.3d 473, 480 (7th Cir.1994), cert. denied, 513 U.S. 1080, 115 S.Ct. 729, 130 L.Ed.2d 633 (1995). We must accept the factual findings of the Board so long as they are supported by substantial record evidence, and we will uphold the Board's legal conclusions "if they have a reasonable basis in the law." America's Best, 44 F.3d at 520 (citing 29 U.S.C. § 160(e)).

In NLRB v. Gissel Packing Co., Inc., 395 U.S. 575, 89 S.Ct. 1918, 23 L.Ed.2d 547 (1969), the Supreme Court first enforced a Board order requiring an employer to bargain with a union in the absence of an election. The Board had imposed the order after finding that the employer's unfair labor practices were likely to have precluded a fair election. The Supreme Court approved the use of such bargaining orders in response to " 'outrageous' " or " 'pervasive' " unfair practices " 'if they are of such a nature that their coercive effects cannot be eliminated by the application of traditional remedies, with the result that a fair and reliable election cannot be had.' " 395 U.S. at 613-14, 89 S.Ct. at 1939-40 (quoting NLRB v. S.S. Logan Packing Co., 386 F.2d 562, 570 (4th Cir.1967)). ³ We have noted that the imposition of such an order is " 'strong medicine ... to be implemented with the utmost care.' " America's Best, 44 F.3d at 520 (quoting Q-1 Motor Express, 25 F.3d at 481). We therefore have required that before imposing such an order, the Board consider whether more traditional remedies...