NLRB v. Medical Ancillary Services, Inc.

• Decision Date: 30 April 1973
• Docket Number: No. 72-1732.,72-1732.
• Parties: NATIONAL LABOR RELATIONS BOARD, Petitioner, v. MEDICAL ANCILLARY SERVICES, INC., Respondent.
• Court: U.S. Court of Appeals — Sixth Circuit

478 F.2d 96 (1973)

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. MEDICAL ANCILLARY SERVICES, INC., Respondent.

No. 72-1732.

United States Court of Appeals, Sixth Circuit.

Argued February 13, 1973.

Decided April 30, 1973.

Jerome H. Brooks, Director, Region 7, N. L. R. B., Detroit, Mich., Roger Hartley, Atty., N. L. R. B., Washington, D. C., for petitioner; Peter G. Nash, Gen. Counsel, Patrick Hardin, Associate Gen. Counsel, Marcel Mallet-Prevost, Asst. Gen. Counsel, Allison W. Brown, Jr., Atty., N. L. R. B., Washington, D. C., on brief.

Robert S. Rosenfeld, Southfield, Mich., for respondent; Keywell & Rosenfeld, James DiMeglio, Southfield, Mich., on brief.

Before CELEBREZZE, MILLER and LIVELY, Circuit Judges.

PER CURIAM.

The case is before the Court upon the petition of the National Labor Relations Board for enforcement of its order of February 1, 1972, finding the Medical Ancillary Services, Inc. (company) in violation of the National Labor Relations Act by its refusal to bargain with the union (Office and Professional Employees International Union, Local 10, AFL-CIO) as the certified representative of the company's employees.

On July 8, 1971, pursuant to a Stipulation for Certification Upon Consent Election executed by the company and the union, an election was conducted among the company's employees. Fifty-one ballots were cast for representation by the union and 49 were opposed to such representation. Following objections to the election filed by the company the Regional Director, pursuant to the Board's rules and regulations, conducted an administrative investigation during which the parties were afforded an opportunity to submit evidence bearing on the issues. The evidence consisted of five affidavits submitted by the company and 10 written statements taken from witnesses by the Regional Director (not of course in the presence of any representative of the company). The Regional Director on July 28, 1972, informed the company that absent withdrawal of the objections he would issue a report recommending to the Board that it overrule the company's objections. The company declined to withdraw the objections and on August 3 the Director issued his Report recommending that the company's objections be overruled in their entirety and that the Board certify the union as the exclusive bargaining representative of the company's employees. The company's motion for reconsideration filed on August 4, supported by affidavits from two employer representatives, was overruled by the Regional Director on August 5, upon the ground that the proffer of new evidence was untimely and would not in any event warrant a result contrary to the result reached in the Director's August 3rd report. The company filed with the Board exceptions to the Director's report, supported by the affidavits presented to the Director and by four additional employees' affidavits, requesting that the election be set aside and a new election ordered. The Board on November 15 adopted the Regional Director's report and recommendations and certified the union.¹ It concluded that the company's exceptions raised no substantial issue of fact or law to warrant reversal of the Regional Director's report.² The company, commencing about October 12, refused to bargain with the union and in answer to an unfair labor practice complaint issued against it by the Board admitted its refusal to bargain, but defended on the ground that the certification was invalid for the reasons urged in its objections to the election. General Counsel in the unfair labor practice proceeding moved for summary judgment on the pleadings which the Board granted. At the same time it found that the company had violated § 8(a)(5) and (1) of the Act by its refusal to bargain. We are of the opinion from an examination of the record and applicable authorities that the Board erred in failing to find that the company was entitled to a hearing before the Board on its exceptions to the election, and consequently in finding the company guilty of violating the Act.

We are aware that the Board has a wide discretion in determining whether a hearing is required to review the administrative findings of the Regional Director in cases of consent elections. Yet this discretion is subject to judicial review where the exceptions to the Director's report raise "substantial and material factual issues." This subject was fully covered by the opinion of this court in N. L. R. B. v. Tennessee Packers, Inc., 379 F.2d 172 (6th Cir.), cert. denied 389 U.S. 958, 88 S.Ct. 338, 19 L.Ed.2d 364 (1967), from which we quote:

"The exceptions must state the specific findings that are controverted and must show what evidence will be presented to support a contrary finding or conclusion. N. L. R. B. v. National Survey Service, Inc., supra 361 F.2d 199 (7 Cir.); N. L. R. B. v. J. R. Simplot Company, supra 322 F.2d 170 (9 Cir.); Macomb Pottery Company v. N. L. R. B., supra 376 F.2d 450 (7 Cir.). Mere disagreement with the Regional Director\'s reasoning and conclusions do not raise `substantial and material factual issues.\' This is not to say that a party cannot except to the inferences and conclusions drawn by the Regional Director, but that such disagreement, in itself, cannot be the basis for demanding a hearing. To request a hearing a party must, in its exceptions, define its disagreements and make an offer of proof to support findings contrary to those of the Regional Director. The Board is entitled to rely on the report of the Regional Director in the absence of specific assertions of error, substantiated by offers of proof.

The purpose behind the rule which requires a hearing only when "substantial and material factual issues" are raised is to avoid lengthy and protracted proceedings, and eliminate unnecessary delays in certifying the results of an election. If a hearing is required to be held on all exceptions to an election or report of a Regional Director, it would unduly lengthen and prolong labor unrest, contrary to the very purposes of the National Labor Relations Act. The cases relied upon by respondent in support of its contention that it is entitled to a hearing, all deal with cases in which the court determined that `substantial and material factual issues\' were raised, and therefore held that the Board erred in not ordering a hearing. United States Rubber Company v. N. L. R. B., 373 F.2d 602 (C.A.5); N. L. R. B. v. Capital Bakers, Inc., 351 F.2d 45 (C.A.3); N. L. R. B. v. Joclin Mfg. Co., 314 F.2d 627 (C.A.2); N. L. R. B. v. Lord Baltimore Press, Inc., 300 F.2d 671 (C.A.4); N. L. R. B. v. Dallas City Packing Co., 230 F.2d 708 (C.A.5); N. L. R. B. v. Poinsett Lumber and Mfg. Co., 221 F.2d 121 (C.A. 4). In N. L. R. B. v. Sidran, 181 F.2d 671 (C.A.5), cited by respondent, the Court could only have held that the Board erred in denying a hearing if `substantial and material factual issues\' were raised." 379 F.2d at 178.

We interpret this decision and the authorities cited as requiring the Board to grant a hearing if the exceptions do indeed raise substantial and material issues of fact and "show what evidence will be presented to support a contrary finding or conclusion." If these criteria are met no formalistic "request" for a hearing is necessary. In such cases it is our view that a request for a hearing is necessarily implied.³

In this case the company's exceptions are detailed, specific and factual as to material issues. They also proffer specific evidence to be relied upon. We think this is self-evident from the exceptions themselves which we reproduce in their entirety in the appendix to this opinion together with the accompanying additional affidavits.

Being of the opinion that the company's exceptions fully complied with the standards for a Board hearing prescribed by its own Rules and Regulations as well as by the applicable authorities, the Board's application for enforcement of its order of February 1, 1972 is denied, the said order and the order approving and adopting the Regional Director's Report, are vacated, and the action is hereby remanded to the Board with directions that the company be afforded a full adversary hearing upon its exceptions to the Regional Director's Report either before the Board itself or a hearing officer. Any findings emerging from such hearing shall be subject to applicable review procedures.

APPENDIX

EMPLOYER'S EXCEPTIONS TO REGIONAL DIRECTOR'S REPORT AND RECOMMENDATIONS ON OBJECTIONS

STATEMENT OF FACTS

Pursuant to a Stipulation for Certification Upon Consent Election executed by the parties and approved by the Regional Director for the Seventh Region of the National Labor Relations Board on June 17, 1971, an election by secret ballot was conducted on July 8, 1971, among the employees of the Employer.

Upon the conclusion of the election a Tally of Ballots was served upon the parties which showed the following results: One hundred (100) valid votes were counted. Fifty-one (51) votes were cast for the Union. Forty-nine (49) votes were cast against the Union. Thus, one (1) vote was the deciding factor in this election.

On July 15, 1971, the Employer filed Objections to Conduct Affecting the Results of Election and attached the affidavits contained in Appendix 1-5. The Employer's objections were as follows:

1. That on July 8, 1971, immediately prior to the election, union supporter Larry Kuzak stated to various employees eligible to vote in the election that Yvonne Tilwick, a fellow employee who was off because of illness, was not going to receive the disability insurance which the employee handbook stated she was entitled to.

2. That on July 8, 1971, immediately prior to the election, union supporter Mary Tavtigian stated to various employees eligible to vote in the election that:

(a) Yvonne Tilwick was not being paid the disability insurance she was entitled to because the company deliberately "screwed up" her claim so that she would not be paid.

(b) Tha

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