NLRB v. Morris Novelty Co.

• Decision Date: 19 June 1967
• Docket Number: No. 18569.,18569.
• Citation: 378 F.2d 1000
• Parties: NATIONAL LABOR RELATIONS BOARD, Petitioner, v. MORRIS NOVELTY CO., Inc., Respondent.
• Court: U.S. Court of Appeals — Eighth Circuit

378 F.2d 1000 (1967)

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. MORRIS NOVELTY CO., Inc., Respondent.

No. 18569.

United States Court of Appeals Eighth Circuit.

June 19, 1967.

Lawrence M. Joseph, Atty., N. L. R. B., Washington, D. C., for petitioner.

Arnold Ordman, Gen. Counsel, Dominick L. Manoli, Associate Gen. Counsel, Marcel Mallet-Prevost, Asst. Gen. Counsel and Charles A. Caffrey, Atty., N. L. R. B., Washington, D. C., were with him on the brief.

Glenn L. Moller, of Moller, Talent & Kuelthau, St. Louis, Mo., for respondent and filed brief.

Before BLACKMUN and MEHAFFY, Circuit Judges and HARPER, District Judge.

MEHAFFY, Circuit Judge.

The National Labor Relations Board has petitioned this court pursuant to § 10 (e) of the National Labor Relations Act, 29 U.S.C.A. §§ 151-166, for enforcement of its order by a three-member panel directed against Morris Novelty Co., Inc., respondent, which Company is engaged in the business of distributing and servicing amusement and vending machines in the St. Louis, Missouri area.¹

The Board found that the Company violated § 8(a) (1) and § 8(a) (5) of the Act.² The Board's finding on § 8(a) (1) was that the Company threatened employees with loss of certain benefits, promised a better insurance program than the Union could secure, and promised and established a procedure for handling employee grievances.³ Additionally, the Board found that the Company violated § 8(a) (5) of the Act by refusing, after a valid and timely demand, to recognize and bargain with the Union as the majority representative of its employees in an appropriate unit. Based on these findings, the Board's order required Morris to cease and desist from interfering with, restraining or coercing employees in the exercise of their statutory rights, and, affirmatively, to bargain with the Union upon request, and also to post appropriate notices. We deny enforcement for lack of record evidence to support the Board's findings.

Morris Novelty is a small company located in St. Louis, employing thirteen people exclusive of clerical help. Louis D. Morris is President and Marvin E. Mitchell is Vice President of the Company. The work schedule for its employees was both generous and loose. The employees were not required to report to work at any fixed time; they normally scheduled their own work and left for home considerably before normal quitting time, depending upon their daily work schedule; they took their lunch time when they saw fit; and used company automobiles and trucks for private errands and trips with the knowledge and consent of the Company. Morris paid its employees a 2% bonus in excess of that paid by competitive companies; expended money for customer Christmas gifts as good will without participation by employees; and, unlike competitive companies; paid all federal and city licenses without charging employees any portion thereof. Morris paid its employees full wages during the first two weeks of any illness and half time for an additional eight week period. All employees were given a one week paid vacation the first year and two weeks in subsequent years. Additionally, Morris gave its employees tax absorbed cash bonuses at Christmastime, and paid employees on an hourly basis for a forty hour week, when in fact they ordinarily worked approximately thirty to thirty-five hours. Its custom was to cosign notes for employees in need of additional funds. In fact, the Company operated more like one big family than a modern business concern, and, because of its liberality and intimacy, the employees were in constant touch with management in a friendly relationship.

Sometime in the fall of 1963, Catlett, one of Morris' mechanic employees, attended a Union meeting at which there were some twenty in attendance, some from competitive companies. Shortly thereafter, Mitchell asked Catlett whether he had attended the meeting, and upon being advised that he had Mitchell asked him what progress had been made. Catlett replied that those in attendance had decided to ask for an hourly wage of $3.00. Mitchell commented that he hoped they would not go too far out of line. This was a friendly conversation and Catlett volunteered to Mitchell that he had signed a Union card. During the same month, which was probably December, 1963, Mitchell asked employee Watson if he had been to a Union meeting the previous night. Watson replied he had not been to the first meeting but had been to the second one. These instances of interrogation occurred more than six months before the charges were filed.

Thereafter, on January 29, 1964, Colvis, a Union agent, wrote Morris claiming that the Union represented a majority of its employees and requested contract negotiations. Immediately upon receiving the letter, Mitchell called Colvis and agreed to meet him at any time during working hours at Colvis' convenience. On February 3, 1964, Colvis, accompanied by two others, called on Mitchell, claiming to represent a majority of the Company's employees. A conversation ensued about the appropriateness of organizing on an industry-wide effort. Mitchell advised Colvis that only Mr. Morris had authority to deal with the Union and that he was on vacation and would not return to the city until late March or early April. When Colvis said that the Union represented a majority of the employees, Mitchell requested the names of the card signers, but Colvis refused to give him the names. Shortly after this meeting, Colvis telephoned Mitchell and asked for Mr. Morris, and was reminded that Mr. Morris would not be back until the latter part of March. Colvis then had a talk with Union attorney Harold Gruenberg, and Gruenberg sent a letter to Mr. Morris, advising that he represented the Union and that the Union represented a majority of the employees in the "classification of mechanics, collectors and helpers excluding clericals, supervisors and guards" and demanded recognition for employees in such unit and requested meetings.⁴ This letter acknowledged that Morris was President of the Association of pinball and novelty machine operators and distributors in the Greater St. Louis area, and advised that the Union represented a majority of all mechanics, collectors and helpers employed by the member firms of the Association, and demanded recognition. Upon receipt of this letter, Mitchell promptly called Gruenberg, advising that such matters would have to be referred to Mr. Morris and giving Gruenberg the name of the Association's attorney. Nothing further was heard from the Union for some three and one-half months, at which time Morris received a copy of the Union's petition to hold an election. This petition did not seek an election in the Association-wide unit, which Gruenberg's letter had indicated they were attempting to organize, but petitioned for an election only among Morris employees. The election was duly held on July 14, 1964, with three employees voting for Union representation and ten against. The Union filed objections to the election, and, after a hearing but before a decision was rendered thereon, a stipulation was entered into by Morris, the Union and the Board. The stipulation provided that, in order to save time and avoid the inconvenience and expense of further litigation, the Regional Director could set aside the results of the election and conduct a new election. On September 8, 1964, pursuant to said stipulation, the Board set aside the election and ordered the Regional Director to conduct a new election. Instead of holding a new election, however, the charges in the instant case were filed and prosecuted.

§ 8(a) (1) — Interference, Restraint and Coercion.

The conversations hereinbefore recited were had in late 1963, more than six months prior to the filing of the charges here, and, therefore, could not under § 10 (b) of the Act be the basis for the complaint. The Board did not find that said conversations constituted an unfair labor practice, but did consider the evidence as background for what it asserts was the continuation of "an unlawful course of conduct designed to thwart the employees' aspirations for Union representation, which continued until after the election." The conversations were friendly and completely lacking in any inference that would demonstrate hostility or antiunion animus. However, in the latter part of June, after the Union had filed its petition for election, Mitchell spoke to four or five employees who were congregated in the office and a discussion ensued in which Mitchell said that unionization might result in "curtailing the use of automobiles for private use," and possibly the utilization of a time clock and the establishment of regular working hours. The Trial Examiner described this statement thusly:

"Vice President Mitchell, during the latter half of June 1964, pointed out to employees directions in which, to meet increased costs which `could\' follow upon the advent of the Union, Respondent `might\' have to turn in searching for economies — tightening up on work schedules, eliminating employees\' use of company cars, and curtailing their use of the company truck."

Mitchell's remarks constituted only his opinion of what possibly might occur upon increased labor costs resulting from unionization. It was a plain, simple statement of obvious facts of economic life. It was undisputed that the employees were given many fringe benefits over and above those received by employees in competitive companies, and by no stretch of the imagination could such a statement constitute an unfair labor practice or be construed as any interference, restraint or coercion. This statement constituted no threat of reprisal or force or promise of benefit and was clearly protected by § 8(c) of the Act.⁵ In construing this section in Texas Industries, Inc. v. N. L. R. B., 336 F.2d 128, 130 (5th Cir. 1964), the court said:

"It is well settled that under § 8(c) the employer must be regarded as a rightful contestant for

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