National Labor Relations Bd. v. Cleveland Trust Co., 11966.

• Decision Date: 27 May 1954
• Docket Number: No. 11966.,11966.
• Parties: NATIONAL LABOR RELATIONS BOARD v. CLEVELAND TRUST CO.
• Court: U.S. Court of Appeals — Sixth Circuit

214 F.2d 95 (1954)

NATIONAL LABOR RELATIONS BOARD v. CLEVELAND TRUST CO.

No. 11966.

United States Court of Appeals, Sixth Circuit.

May 27, 1954.

Frederick U. Reel, Washington, D. C., George J. Bott, David P. Findling, A. Norman Somers, Frederick U. Reel, Jean Engstrom, Washington, D. C., on brief for petitioner.

Welles K. Stanley, Carl H. Clark, Stanley, Smoyer & Schwartz, Cleveland, Ohio, Hawley E. Stark, Douglas, Stark, Jett & Biechele, Cleveland, Ohio, for respondent.

Before SIMONS, Chief Judge, and ALLEN and MILLER, Circuit Judges.

ALLEN, Circuit Judge.

This petition to enforce an order of the National Labor Relations Board arises out of a complaint charging that the respondent violated the National Labor Relations Act, 29 U.S.C.A. § 151 et seq., in the alleged discriminatory discharge of employee William Sorger, in the granting of wage increases and increased vacations with pay to the employees for the purpose of discouraging membership and activities on behalf of the union, and that it interrogated employees concerning their union affiliation and memberships and warned them to refrain from becoming members of the union. The trial examiner found that the discharge of Sorger was for cause without knowledge of Sorger's activities on behalf of the union and was not discriminatory. The Board concurred in this ruling but held that upon the other charges the respondent had been guilty of unfair labor practices and issued the usual cease and desist orders.

Respondent gave its employees two wage increases, one on November 21, 1950, and one on April 1, 1951. The union drive for membership was begun in the fall of 1950 and open organization meetings were held on October 19th and November 2nd in Cleveland, Ohio.

The trial examiner found that, because of a sudden turnover in employment in the area, the raising of wages by other employers in competing banks, the inflationary trend in the national economy, the rise in income tax rates, plus the threat of a wage freeze, the respondent did not by granting the increase of November 21, 1950, violate the Act.¹ This finding was not sustained by the Board, which held the increase to be an unfair labor practice because it was announced in a letter which expressed hostility to the union.

The sending of the letter by respondent to its employees, dated November 21, 1950, which announced a salary increase effective November 15, 1950, came about as follows: When the union began to organize its campaign, some of the bank's employees asked their supervisors for information concerning the union. These inquiries were referred to management and the president of the bank gave an extended talk to the supervisors. A copy of this talk was mailed to each employee November 21, 1950. The statements of fact made in this letter are not controverted. Both the examiner and the Board found that it contained no coercive or illegal statements and was protected by Section 8(c). In substance the supervisors were instructed as follows: The employees have a right to join a union and to convince others to join so long as the compaign is carried on during non-working time. Employees have an equal right to refuse to join the union and to convince others that they should not join; if they have joined they have a right to withdraw. The anti-union campaign must also be carried on in non-working time. Representatives of management can neither threaten nor intimidate employees in the making of their choice, nor promise a benefit. Management representatives must refrain from interrogating employees regarding union activities and must not ask any employee if he has joined a union or attended union meetings, if he knows who has joined, and if he knows who has attended a meeting.

The letter called attention to benefits enjoyed by the employees, such as group life and accident insurance carried without cost to employees and the pension plan for employees which had been in effect for many years. It also stated that employees with over 19 years' tenure would receive a three weeks' annual vacation with pay instead of the two weeks' paid vacation theretofore granted. Under Section 702(e) of the Defense Production Act of 1950 this increase in vacations with pay was included in the phrase "wages, salaries, and other compensation", 64 Stat. 816, authorized to be stabilized or frozen. If the increase in vacation periods had not been granted prior to the issuance of the freeze order, January 26, 1951, which was expected to be made shortly, the increase in vacations could not have been given without the prior approval of the Wage Stabilization Board.

The reason for the salary increase was stated in the letter to be the recent increase in the cost of living, the increase in the federal income tax, and the possibility of a threatened wage freeze in the immediate future. The vacation increase for the employees with 19 years' service had been discussed for a number of years. Similar increases had recently been made by other banks. 384 out of 1900 employees of respondent were eligible for this three weeks' vacation. This explanation given fully in respondent's answer was not controverted in the evidence. Counsel for the Board in open court stated that he did not question the truth of respondent's statements in its literature. The Board offered no testimony and respondent's explanation of its reasons for the salary and vacation increases is undisputed.

The Board set aside the finding of the trial examiner that the increase of salaries put into effect November 21, 1950, did not constitute a violation of the Act. The Board ruled that, since the wage increase was announced in the letter described above and about six weeks in advance of the regularly scheduled review of wages, this increase was intended and calculated to influence the employees to reject the union as their collective bargaining representative. The question, therefore, is squarely posed whether, in view of Section 8(c), it is a violation of the Act for an employer, in a non-coercive letter expressing opposition to the union, to call the employees' attention to benefits already enjoyed by the employees, such as insurance without cost to the employees, pension plans, a change in vacation benefits already determined, a general wage increase already made, granted outside of the usual schedule, the date being advanced admittedly because of competitive pressure from similar organizations, conceded sharp increases in the cost of living and action of the Wage Stabilization Board.

The finding that the announcement of the advancement of increases in salaries to November 21, 1950, was made in order to encourage opposition to the union and violates the Act, ignores various emphatic circumstances. The explanation of the increase made by the respondent has never been denied. The Board is not authorized to ignore material uncontradicted facts. It is required under Section 7(c) of the Administrative Procedure Act, 5 U.S.C.A. § 1006(c), to impose no sanction or rule or order or issue any rule or order "except upon consideration of the whole record * * * and as supported by and in accordance with the reliable, probative, and substantial evidence."

Moreover, the letter itself is a written statement and Section 8(c) protects any and all statements made by employers which contain no threat of reprisal or force or promise of benefit. The letter was found by both the examiner and the Board to be protected by 8 (c), in other words, to contain neither promises nor threats. As to the increase of November 21, 1950, the trial examiner who heard the witnesses stated that the testimony of Kingsbury, respondent's personnel director, and the principal witness as to the increases, was credible and uncontroverted. The proposition for this particular increase was made in the late summer of 1950, when Kingsbury learned from personnel officers of two competing banks that they planned salary increases. In August, 1950, Kingsbury discussed with the bank's president the advisability of taking similar action and recommended it. This was several weeks prior to the first organization meeting of the union (September 21, 1950) and prior to any knowledge on Kingsbury's part of union activities. On October 5, prior to the union's first open meeting (October 19, 1950), Kingsbury renewed this proposition with the bank's president. The probability of the increase was announced to a group of the bank's branch managers on October 11 and the usual meetings to arrange the details of the increase with the branch managers and department heads followed. The fact that this increase was planned and approved before the union began its open organization campaign is uncontradicted. The fact that it was announced in a statement in which the bank expressed opposition to the union does not make the increase an unfair labor practice. It is not a promise of future economic benefit when an employer recounts that an increase in salary has already been made, nor is it a violation of the Act to announce it. An employer is entitled, in absence of coercion or promise of benefit, to recount the beneficial effects of the relationship with his employees. This is part of freedom of speech and upon this point the order of the Board cannot be enforced.

As to the vacation increases, it is not disputed that they were made under the threat of wage stabilization, which was ordered in January, 1951, and that they were a part of the picture of inflationary inequities operating upon these employees with fixed salaries intended to be covered by the provisions for wage stabilization. There is no evidence in the record that the vacation increases were determined in order to influence employees to vote against the union.

The increase of April 1, 1951, also held invalid, was not announced in advance. No evidence was adduced controverting respondents sworn statement that this wage increase was made to correct inequities created by the...