NLRB v. Gotham Industries, Inc., 7160.

Decision Date14 January 1969
Docket NumberNo. 7160.,7160.
Citation406 F.2d 1306
PartiesNATIONAL LABOR RELATIONS BOARD, Petitioner, v. GOTHAM INDUSTRIES, INC., and Crawford Plastics Corp., Respondents.
CourtU.S. Court of Appeals — First Circuit

Warren M. Davison, Washington, D. C., attorney, with whom Arnold Ordman, Gen. Counsel, Dominick L. Manoli, Associate Gen. Counsel, Marcel Mallet-Prevost, Asst. Gen. Counsel, and Corinna Lothar Metcalf, Washington, D. C., attorney, were on brief, for petitioner.

Jerome Medalie, Boston, Mass., with whom David I. Riemer, Julius Thannhauser and Cohn, Riemer & Pollack, Boston, Mass., were on brief, for respondents.

Before ALDRICH, Chief Judge, STALEY,* Senior Circuit Judge, and McENTEE, Circuit Judge.

ALDRICH, Chief Judge.

This is a petition for enforcement of an order of the National Labor Relations Board based upon certain conduct in connection with a promise of a wage increase in alleged violation of section 8(a) (1) of the Act. 29 U.S.C. § 158(a) (1). The facts are somewhat complex and, in their totality, unusual. At Fitchburg, Massachusetts, in a single building, respondents operate two different but related businesses, Gotham Industries, Inc. and Crawford Plastics Corp., which for present purposes constitute a single enterprise. In July 1963 a union1 began organizing Gotham's employees and an election was held that November. The union received less than 20% of the votes. The regional director set the election aside because of misconduct by Gotham, and directed that a new election be held "at a date and time to be determined." In January 1964 the union filed unfair labor practice charges, which were sustained by a trial examiner and by the Board. Gotham Indus., 1964, 150 N.L.R.B. 63. Gotham's nonacceptance required review by this court. At the hearing before us Gotham pressed only the alleged overbreadth of the order. Since in this particular it had failed to protect its rights, in May 1966 we directed, without a reported opinion, that the order be enforced. Gotham apparently complied with the order, including the 60-day posting requirement, on or before August 30, 1966, as on that date it was sent the customary compliance letter.

With this background we turn to the facts upon which the present findings of violation are based. In early August 1966 some of the older employees in Crawford's molding room held a meeting of the day shift to demand a wage increase. At their invitation plant superintendent Stauble attended and agreed to discuss their demands with Robert Gottsegen, general manager of both companies. So informed, Gottsegen investigated, and before the end of the month told certain Crawford employees that a wage increase would be made in December. Formal notification of the increase was received by the Gotham and Crawford employees on September 14 and 22, respectively.

On September 23 the regional director informed Gottsegen that a "rerun" election would be scheduled shortly. After he designated the date the union filed an unfair labor practice charge predicated essentially upon the promised wage increase,2 and the regional director promptly cancelled the designation.

Thereafter, on October 17, in response to a request by employee Arsenault for a 20 cent raise, Stauble informed her that he could not comply because "the union has stepped in and taken away the 10 cent raise." On October 27, Gottsegen, in response to further inquiries about the fate of the promised raise, distributed a notice to all employees which stated, inter alia,

"As you know, the Retail Wholesale Department Store Union has filed with the National Labor Relations Board unfair labor practice charges alleging that this pay increase was an unfair labor practice. The Company thinks this charge is absurd and is doing everything in its power to prevent the union from denying our employees this very much needed and very much deserved increase. We are unable to understand why the union, who says they are interested in our employees\' welfare, is trying to interfere with our giving you higher pay. Our lawyers are now presenting our views regarding this pay increase to the National Labor Relations Board and we hope to have further information on this in about ten (10) days.
You need this pay increase, you deserve this pay increase, and we intend to give it to you."

And, finally, on December 1, the wage increase was instituted.

General Counsel's complaint, filed January 10, added to the charge concerning the promise of a wage increase, charges that from and after September 22 respondents' officers and agents, particularly Stauble, threatened the employees with retracting the promise of a wage increase if the employees continued to adhere to the union, and that on October 27 they posted a notice that the union was seeking to prevent the wage increase. The charge of threatening to take away the wage increase was contradicted by the notice itself, and was not established. Certain other charges made in the complaint were also not supported, and need not detain us.

After hearing, the trial examiner concluded, as an ultimate finding, that in August respondents "knew that subsequent to the expiration of the 60-day posting period required by the Board's order * * * a rerun election would be scheduled * * * and that it was for reasons closely related to the impending employees' election that * * * the announcement of a year-end pay increase was made." He also found that the statements of Stauble and the October 27 notice regarding the union's intentions were misrepresentations seriously prejudicial to the union and to a free election, and thus supported a conclusion that the initial promise of wage increases was improperly motivated. He recommended that a section 8(a) (1) order be made as to both of these matters. The Board affirmed. Gotham Indus., 1967, 167 N.L.R.B. No. 91.3

We deal first with the promise of a wage increase. Board counsel conclude, "The record in this case amply warrants the Board's finding of unlawful motivation" for the wage increase, and thus satisfies the Supreme Court's holding in NLRB v. Exchange Parts Co., 1964, 375 U.S. 405, 409, 84 S.Ct. 457, 460, 11 L.Ed.2d 435, that section 8(a) (1) "prohibits not only intrusive threats and promises but also conduct immediately favorable to employees which is undertaken with the express purpose of impinging upon their freedom of choice for or against unionization and is reasonably calculated to have that effect." We agree with the Board's acceptance from the outset of the necessity of showing improper motivation for this 8(a) (1) violation.4 Having done so, and in light of the fact that the employer came forward with affirmative evidence of proper business justification, the ultimate burden was upon the Board to show that the promise was primarily motivated by an antiunion purpose. Jervis Corp., Bolivar Division v. NLRB, 6 Cir., 1967, 387 F.2d 107, 113 n. 4; NLRB v. Crosby Chem., Inc., 5 Cir., 1960, 274 F.2d 72, 74 n. 5; see also NLRB v. Billen Shoe Co., 1 Cir., 1968, 397 F.2d 801, 803.5

Passing the exceptional employer who may raise wages out of fraternal generosity, we suppose that most nonunion employers give raises for one or both of two reasons: to keep employees, old and new, in the plant, and to keep unions out. As to the latter it cannot be that every time it can be shown that an employer was seeking to stay one step ahead of unionization he was guilty of an unfair labor practice; the situation must have sufficiently crystallized so that some specific orientation exists. It would be a sorry consequence if the Labor Relations Act were to be construed as causing every nonunionized employer to think twice before initiating a wage increase lest some union should appear and claim that it had been frustrated. Cf. Bok, The Regulation of Campaign Tactics in Representation Elections Under the National Labor Relations Act, 78 Harv.L.Rev. 38, 114 (1964). At a minimum it must be that to establish improper motivation requires a showing that an employer knows or has knowledge of facts reasonably indicating that a union is actively seeking to organize, or else that an election is, to use the Board's word, impending. See Norfolk Livestock Sales Co., 1966, 158 N.L.R.B. 1595; Sigo Corp., 1964, 146 N.L.R.B. 1484, 1486; Imco Container Co. v. NLRB etc., 4 Cir., 1965, 346 F.2d 178, 180. Cf. NLRB v. Radcliffe, 9 Cir., 1954, 211 F.2d 309, 315, cert. denied Homedale Tractor & Equipment Co. v. NLRB, 343 U.S. 833, 75 S.Ct. 56, 99 L. Ed. 657. We are concerned here only with the latter alternative as there was no suggestion of any organizational activities, let alone activity that might have come to respondents' attention.

The examiner treated the issue of respondents' knowledge one way; the Board, in its argument before us, in another. We consider first the examiner's approach. He concluded that respondents "well knew that another representation election was in the offing." There was no direct evidence, however, of such knowledge, and the conclusion was exclusively an inference. Indeed, all the affirmative evidence was to the contrary. The testimony was that, prior to September 23, no one had informed any representative of the respondents that an election was still possible. Respondents' express denials of knowledge were unshaken on cross-examination. In addition, there was evidence that respondents had been informed by their counsel in May 1966, after our decision, that the likelihood of reappearance of the union, in light of its substantial defeat and the lengthy period of subsequent inactivity, was remote. Even more negative than inactivity, we would think that if in August the employees were interested in a union they would have exerted their efforts in that direction rather than in endeavoring to persuade the respondents on their own.

The trial examiner gave certain facts as supporting his inference of knowledge that an election was impending. The first was that the order of...

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