NLRB v. Smith Industries, Inc.

• Decision Date: 12 November 1968
• Docket Number: No. 25691.,25691.
• Citation: 403 F.2d 889
• Parties: NATIONAL LABOR RELATIONS BOARD, Petitioner, v. SMITH INDUSTRIES, INC., Respondent.
• Court: U.S. Court of Appeals — Fifth Circuit

403 F.2d 889 (1968)

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. SMITH INDUSTRIES, INC., Respondent.

No. 25691.

United States Court of Appeals Fifth Circuit.

November 12, 1968.

Marcel Mallet-Prevost, Asst. Gen. Counsel, Arnold Ordman, Gen. Counsel, Dominick L. Manoli, Associate Gen. Counsel, William Wachter, William H. Carder, Abigail Baskier, Attys., N. L. R. B., Washington, D. C., for petitioner.

Louis B. Paine, Jr., Houston, Tex., Thomas R. Beech, Washington, D. C., for

respondent; Butler, Binion, Rice, Cook & Knapp, Houston, Tex., of counsel.

Before GOLDBERG and AINSWORTH, Circuit Judges, and SPEARS, District Judge.

AINSWORTH, Circuit Judge:

The question for decision is whether the National Labor Relations Board erred in granting summary judgment against the employer in the company's challenge to a collective bargaining representation election at which the union prevailed, without affording a formal hearing on the employer's objections to the election, and whether the denial of the requested hearing constituted a deprivation of constitutional due process of law. We hold that the summary decision of the Board, without allowing the employer to present evidence at a formal hearing, was, under the circumstances of this case, a denial of due process of law.¹

On April 7, 1966, an election was held among the employees of Smith Industries (employer) in order to designate a collective bargaining representative, and the United Steelworkers of America, AFL-CIO (union), prevailed by a vote of 111 votes to 85 votes (with 16 challenged ballots). The employer filed objections to the election on the grounds that the union had made material misrepresentations as to wages and benefits paid by a unionized competitor in a handbill distributed two days before the election, and that numerous employees had been coerced into voting for the union. The Regional Director conducted an ex parte investigation² and recommended that the company's objections be overruled. The company requested that the Board set aside the election or hold a hearing on its exceptions to the Regional Director's recommendations, but these requests were denied and the union was certified. Thereafter, the company refused to bargain with the union, and the union filed an unfair labor practice charge under Section 8(a) (5) of the National Labor Relations Act (29 U.S.C. § 158(a) (5)). A refusal to bargain is a common method for challenging the Board's certification of a union since Board decisions in representation proceedings usually are not reviewable by the courts of appeals. N. L. R. B. v. Air Control Products of St. Petersburg, Inc., 5 Cir., 1964, 335 F.2d 245, and cases cited therein. See Neuhoff Brothers Packers, Inc. v. N. L. R. B., 5 Cir., 1966, 362 F.2d 611; Home Town Foods, Inc. v. N. L. R. B., 5 Cir., 1967, 379 F.2d 241. After the complaint was issued, the General Counsel filed a motion for summary judgment alleging "that there is no genuine or disputed issue as to any material fact," contending that the issues in the representation proceeding had already been litigated. The company responded with certain offers of proof, but the Trial Examiner granted the General Counsel's motion. The Board affirmed the Trial Examiner's ruling.³

In order to obtain a hearing in a post-election representation proceeding,⁴ the objecting party must supply prima facie evidence, presenting "substantial and material factual issues," which would warrant setting aside the election. 29 C.F.R. § 102.69(c).⁵ This administrative standard is also the constitutional standard under the due process clause.⁶ Classically, a hearing is required where it is necessary to preserve a party's rights. As Chief Judge Brown of this Circuit has formulated the doctrine in N. L. R. B. v. Air Control Products of St. Petersburg, Inc., 5 Cir., 1964, 335 F.2d 245, 249:

"If there is nothing to hear, then a hearing is a senseless and useless formality. * * * `the Constitution protects procedural regularity, not as end in itself, but as a means of defending substantive interests.\'"

Thus "a hearing is unnecessary * * * where if all the facts contended for by the objecting party `were credited no ground is shown which would warrant setting aside the election.'" N. L. R. B. v. Bata Shoe Company, 4 Cir., 1967, 377 F.2d 821, 826, citing N. L. R. B. v. Air Control Products of St. Petersburg, Inc., supra. However, there is great difficulty in determining when there is "nothing" to be heard,⁷ and in this regard, we find Professor Davis' approach helpful.⁸

"Facts pertaining to the parties and their activities, that is, adjudicative facts, are intrinsically the kind of facts that ordinarily ought not to be determined without giving the parties a chance to know and to meet any evidence that may be unfavorable to them, that is, without providing the parties an opportunity for a trial type of hearing.

"Adjudicative facts are facts about the parties and their activities, businesses, and properties, usually answering the questions of who did what, where, when, how, why, with what motive or intent; adjudicative facts are roughly the kind of facts that go to a jury in a jury case." (Emphasis added.)

Davis, The Requirement of a Trial-Type Hearing, 70 Harv.L.Rev. 193, 199 (1956). Thus, this Court's standards for the granting of summary judgment on pleadings and affidavits are instructive as to whether the Board acted within constitutional limits in failing to grant a hearing.

In order for a case to go to a jury, the evidence must be "of such a character that reasonable men exercising impartial judgment may differ in their conclusion, * * *." Cater v. Gordon Transport, Inc., 5 Cir., 1968, 390 F.2d 44, 46, cited in Keating v. Jones Development of Missouri, Inc., 5 Cir., 1968, 398 F.2d 1011, 1013. As a corollary to this rule, a "summary judgment can be granted only when there is `no genuine issue as to any material fact and * * * the moving party is entitled to a judgment as a matter of law.'" Keating v. Jones Development of Missouri, Inc., 5 Cir., 1968, 398 F.2d 1011, 1013, citing Fed.R. Civ.P. 56(c).⁹ While a party may not avoid a summary judgment merely by denying an opponent's allegations, Erickson v. United States, 5 Cir., 1965, 340 F.2d 512, it "should be granted only * * * where it is quite clear what the truth is." National Screen Service Corp. v. Poster Exchange, Inc., 5 Cir., 1962, 305 F.2d 647, 651. If the Court must rely "upon an inquiry into the surrounding facts and circumstances, the Court should refuse to grant a motion for a summary judgment until the facts and circumstances have been sufficiently developed to enable the Court to be reasonably certain that it is making a correct determination of the question of law." Palmer v. Chamberlin, 5 Cir., 1951, 191 F.2d 532, 540, 27 A.L.R.2d 416. Indeed, summary judgment may be improper even where "the historic facts" are free of controversy:

"It is often the case that although the basic facts are not in dispute, the parties nevertheless disagree as to the inferences which may properly be drawn. Under such circumstances the case is not one to be decided on a motion for summary judgment."

Keating v. Jones Development of Missouri, Inc., 5 Cir., 1968, 398 F.2d 1011, citing America Fid. & Cas. Co. v. London & Edinburgh Ins. Co., 4 Cir., 1965, 354 F.2d 214, 216.

We proceed to examine the facts of this case in the light of the above discussion. First, the Board found that the union had misrepresented that it had a Christmas bonus plan in writing at a competing company, whereas, in actuality, the agreement was oral. However, the employer in this case offered to prove through the testimony of Robert Bambace, an attorney for the competitor, that the union had traded off the Christmas bonus as a part of the total wage package. Undoubtedly, under some circumstances, if the company's contention is accurate, the election should be set aside.¹⁰ Thus, the Board acted improperly in failing to hold a hearing to resolve this disputed issue of fact upon the employer's offer of prima facie evidence, and the Board should have reserved judgment until the facts and circumstances were "sufficiently developed to enable the Board to be reasonably certain that it is making a correct determination of the question of law." Palmer v. Chamberlin, 5 Cir., 1951, 191 F.2d 532, 540, 27 A.L.R.2d 416.

Second, the employer offered to prove through the testimony of Marion Faulkner, personnel director of the employer, that various employees had informed him of threats made against them to compel them to vote for the union. The employer presented the affidavits of eight employees who alleged that they had been coerced, and offered to have other employees testify to the same effect. Under the recent decision of Howell Refining Co. v. N. L. R. B., 5 Cir., 1968, 400 F.2d 213, and even under earlier Fifth Circuit cases,¹¹ it is clear that the employer brought forth enough evidence to raise substantial and material issues of fact. The Board found that even assuming these acts of coercion actually occurred (although the accused employees denied this), there was no proof of an agency relationship between those employees making the threats (particularly one Charles DiPasquale) and the union. Ignoring the fact that the Board applied an improper legal standard,¹² the employer is entitled to a hearing on the agency dispute. It offered to prove through the testimony of its personnel director that DiPasquale had the reputation of being the chief union organizer, though the union failed to designate any official representatives. As this Court held in Howell Refining Co. v. N. L. R. B., 5 Cir., 1968, 400 F.2d 213:

"Our review of the record in the instant case convinces us that substantial and material factual issues are present and that the evidence tendered by the company meets the prescribed standards. Specifically, we find that the company\'s allegation that the individuals involved were union

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