NLRB v. Exchange Parts Company

• Decision Date: 22 June 1962
• Docket Number: No. 19106.,19106.
• Citation: 304 F.2d 368
• Parties: NATIONAL LABOR RELATIONS BOARD, Petitioner, v. EXCHANGE PARTS COMPANY, Respondent.
• Court: U.S. Court of Appeals — Fifth Circuit

304 F.2d 368 (1962)

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. EXCHANGE PARTS COMPANY, Respondent.

No. 19106.

United States Court of Appeals Fifth Circuit.

June 22, 1962.

Marcel Mallet-Prevost, Asst. Gen. Counsel, Dominick L. Manoli, Associate Gen. Counsel, Alfred Brummel, Atty., Stuart Rothman, Gen. Counsel, Rosanna A. Blake, Atty., National Labor Relations Board, Washington, D. C., for petitioner.

Karl Mueller, Harold E. Mueller, Mueller & Mueller, Fort Worth, Tex., for respondent.

Before RIVES, BROWN and WISDOM, Circuit Judges.

WISDOM, Circuit Judge.

This case presents the question whether it is an unfair labor practice for an employer to announce benefits to employees shortly before a representation election.

In the absence of objective evidence of any taint of restraint or coercion by the employer, the benefits not being conditioned on the employees' renunciation of their right to organize or of any other rights, we hold that the announcement of employee benefits is not an unfair labor practice even if timed to have a persuasive effect on the election.

The Exchange Parts Company of Fort Worth, Texas, rebuilds automobile parts. Before November 1959 its employees were not represented by a union. November 4 the Company mailed to each employee a letter stating that its officials had recently returned from an industry conference at which "a great deal of emphasis was placed on employee welfare". The letter invited the employee and his wife to a dinner that night or the following night to discuss information important to the employees. At the dinners held November 4 and 5 C. V. McDonald, the vice president and general manager of Exchange Parts, announced that the 1959 floating holiday would be the day after Christmas and that the employees would receive an additional floating holiday during 1960. November 9 the International Brotherhood of Boilermakers, Iron Shipbuilders, Blacksmiths, Forgers and Helpers, AFL-CIO, wrote the respondent that it represented a majority of the employees and requested a meeting to discuss contract terms. A week later the Union petitioned the National Labor Relations Board for a representation election. The Board held a hearing on the petition December 29 and issued an order February 19, 1960, scheduling an election March 18.

At the annual Christmas party in December McDonald did not announce the date of the 1960 floating holiday. He testified that at that time the Company was investigating whether it would be feasible to allow each employee to take the holiday on his birthday. Around January 1 the study was completed. The Company concluded that the birthday holiday was feasible and allowed the employees to vote on whether they would prefer it to a regular floating holiday. Since the only available place where the Company could hold an unsegregated meeting of all its employees, the Pioneer Palace, was unavailable in January, the dinner meeting was delayed until February 25. At the meeting the employees voted in favor of the birthday holiday. McDonald spoke during the meeting about the pending representation election. He said that the Union organizers had twisted some of the facts around to put the Company in a bad light; he pointed out the many benefits that the Company had given the employees, and he concluded by urging all the employees to vote in the election.

March 4 the Company wrote the employees asserting that they did not need a Union to obtain additional improvements in the future and asking the employees to vote against the Union. The letter announced as a benefit added in 1960 a new method for calculating overtime in the weeks containing a paid holiday. Under the old system the workers were paid for the hours not worked on the holiday but these hours were not included in the calculation of the workers' overtime earnings; since the regular work week included several overtime hours the employees did not earn as much in a holiday week as in a regular week. The new system gave the workers overtime as well as base rate credit for the holiday and thus removed the reduction in overtime pay. In announcing the change the letter stated, "This will mean $5 to $6 more per employee per holiday." Exchange Parts argues that this new overtime pay system was not introduced by the March 4 letter but instead was initiated July 4, 1959. The system was used that holiday and the Company announced that this was in accordance with company policy, but it did not state clearly that the policy would be followed for subsequent holidays. The Union argued that the system was used then because July 4 fell on a Saturday when the employees normally work only half a day and therefore would not receive a full paid holiday. The new overtime system was not used for later holidays during 1959, which McDonald attributed to an error on the part of the accounting department. McDonald said that it was also an error that the new system was listed as a new benefit added during 1960 in the letter sent to the employees March 4, 1960.

The March 4 letter also stated that a new vacation system had been adopted during 1960 which would allow the employees to take an additional one and one-half days vacation. Before 1960 each employee was required to take his week of vacation during a regular pay week, beginning Friday morning and ending Thursday evening. The men were paid Friday for the preceding work week. At the end of 1959 the Company shifted the pay week forward one day to give the accounting department an extra day for making up the pay checks before distribution on Friday. The Company then decided to abandon the requirement that a worker's vacation week coincide with the pay week, which with the new pay week would have scheduled the vacations from Thursday to Wednesday, and to allow employees to take a calendar week vacation. The change gave the employee a week-end at each end of his vacation and allowed him to be away for a longer time, although it did not grant him any actual increase in his paid vacation. The Company asserted that it established this policy at the start of 1960 and that during February certain employees took vacations on the new basis. The March 4 letter was, however, the first general announcement to all the employees of this new policy.

I.

The parties hotly dispute whether the birthday holiday, the holiday overtime pay, and the change in vacations represent an effort by Exchange Parts to influence the representation election by an increase in employee benefits just before the voting. The hearing examiner found that in 1955 Exchange Parts established its first paid holiday and announced that it would add an additional paid holiday each year. In 1958 there were four paid holidays. Early in 1959 McDonald announced that another paid holiday would be granted as a floating holiday. November 4 and 5 he announced that the new 1959 holiday would be the day after Christmas and also stated that in 1960 a sixth holiday would be added. Since there was no evidence to indicate that the Company knew of the Union's organizational campaign at that time, these findings clearly negate any inference that the sixth holiday was added as a result of the representation election or in an attempt to influence its outcome. The trial examiner found, however, that the announcement of the holiday was timed to influence the election. He stated, "I see no reason why McDonald could not have followed custom and announced the holiday at the Christmas party, or at least informed the employees the birthday holiday was then under consideration." He also questioned why the announcement of the plan for the birthday was delayed until the February 25 party.

We are unable to accept the imputation of blame to the Company on this point. There is no basis for the examiner's finding that McDonald should have announced the 1960 holiday at the Christmas party, since McDonald already had made that announcement November 4 and 5. Nor is there any rational basis for the hearing examiner to conclude that McDonald was under an obligation to announce at the Christmas party that the birthday holiday was under consideration, under pain of an examiner and the Board concluding that such omission amounted to interference with union organization. On the contrary, it seems reasonable to us for the Company not to make an announcement about the birthday holiday that might stir up employee hopes and expectations until it had determined that the holiday was economically feasible. Finally, we can see no adequate basis for attributing an improper motive to the delay in the announcement until February 25, in view of the finding that a January meeting was not possible because of the unavailability of the Pioneer Palace. Such speculations do not reach the dignity of findings. See N. L. R. B. v. McGahey, 5 Cir., 1956, 233 F.2d 406.

II

The story takes a different turn when we come to the holiday overtime pay and the vacation period. In its March 4 letter the Company announced both of these as new benefits added in 1960. This letter by itself constitutes substantial evidence of the creation of these benefits. The only question Exchange Parts raises relates to the timing; the employer asserts that the new overtime pay was established in 1959. This assertion, to say the least, is not so overwhelming that it compels acceptance as a matter of law. One might well raise an eyebrow over the contention that both the accounting department and those responsible for drafting the March 4 letter would have made such errors, and that the errors would have gone unnoticed, if the Company really had established the increased overtime pay as a permanent policy July 4, 1959. The new vacation week system may not be of prime importance but is a significant fringe benefit. It is a rational inference from the record that the new system was introduced in 1960 and announced generally for the first time in the March 4 letter. This is not the whole story, however.

The...