NLRB v. Sonora Sundry Sales, Inc.

• Decision Date: 02 August 1968
• Docket Number: No. 21909.,21909.
• Parties: NATIONAL LABOR RELATIONS BOARD, Petitioner, v. SONORA SUNDRY SALES, INC., d/b/a Value Giant, Respondent.
• Court: U.S. Court of Appeals — Ninth Circuit

399 F.2d 930 (1968)

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. SONORA SUNDRY SALES, INC., d/b/a Value Giant, Respondent.

No. 21909.

United States Court of Appeals Ninth Circuit.

August 2, 1968.

Warren Davidson (argued), Roy O. Hoffman, Director, N.L.R.B., San Francisco, Cal., Arnold Ordman, Gen. Counsel, Dominick L. Manoli, Associate Gen. Counsel, Marcel Mallet-Prevost, Asst. Gen. Counsel, Washington, D. C., for appellant.

Arthur Mendelson (argued), of Littler, Mendelson & Fastiff, San Francisco, Cal., Davis & Cowell, Oakland, Cal., for appellee.

Before MERRILL and DUNIWAY, Circuit Judges, and TAYLOR, District Judge.

MERRILL, Circuit Judge:

This case is before the court upon petition of the National Labor Relations Board to enforce its order issued against respondent on November 1, 1966, as reported at 161 N.L.R.B. No. 53. The Board found that respondent had violated § 8(a) (1) of the Act, 29 U.S.C. § 158(a) (1), by threatening its employees that execution of a union contract would result in decreased wage rate. The Board also found that respondent had refused to recognize and bargain with the union which represented a majority of the employees in violation of § 8(a) (5) of the Act, 29 U.S.C. § 158(a) (5).¹ The Board adopted the findings of the trial examiner as set forth in the margin.² From

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these findings the trial examiner concluded that no unfair labor practice had been established and recommended that the complaint be dismissed. The Board disagreed.

§ 8(a) (1) Charge

The charge that respondent threatened its employees with a wage decrease if a union contract were to be executed is based upon the facts found by the trial examiner under his subheading "3. Speech of Russell Robinson, June 12, 1965." The trial examiner concluded that Robinson's remarks were protected under § 8(c) of the Act, 29 U.S.C. § 158(c).³

We agree. It is not a "threat of reprisal" for an employer to suggest that he will, if he signs it, adhere to the terms of a union contract. If those terms are disadvantageous it is the employer's right to make fair comment upon that fact and the employees' right to have him do so. Certainly a disadvantageous contractual provision cannot rationally be converted into an employer's threat of reprisal because the employer pointed it out. Statements of much greater antiunion intensity than this fall within § 8(c) protection. See NLRB v. TRW-Semiconductors, 385 F.2d 753 (9th Cir. 1967). See also Don The Beachcomber v. NLRB, 390 F.2d 344 (9th Cir. 1968).

§ 8(a) (5) Charge

The question here is whether in its refusal to accept the union authorization cards as establishing the union's majority status the employer entertained a good-faith doubt as to such status. The trial examiner concluded that it did. We agree.

On June 5, 1965, while the union was still engaged in soliciting membership, and before any recognition demand had been made, the company president, Kase, expressed his doubt that such cards as resulted would truly reflect representation desires of the employees. This doubt had two bases: (1) that the employees might well be intending to express only a wish for an election; (2) that they were apparently being misled as to the terms of the contract which would probably be signed if the union were made the bargaining agent. In no respect do the facts adversely reflect upon the good faith of Kase's doubts as they then existed. Later events demonstrated that in both respects the doubts were justified.

Whether the employer's conjecture that the authorization cards might be intended to express only a wish for an election is a sufficient basis for good-faith doubt of majority status we need not decide. Compare, e. g., NLRB v. Cumberland Shoe Corp., 351 F.2d 917 (6 Cir. 1965), with NLRB v. S. E. Nichols Co., 380 F.2d 438 (2d Cir. 1967). But when combined with the belief that the union was misrepresenting the terms of the anticipated collective bargaining agreement in order to procure the authorization cards, there was a sufficient basis for good-faith doubt that the cards represented a fair and free designation of the union as bargaining agent for the majority of the employees. In the face of such doubts the question of majority status encompasses more than the simple issue of the authenticity and number of signatures secured. The significance of the cards as representative of employee desires has become a relevant inquiry and accommodation must be made for its resolution. For these reasons the existence of such doubts as Kase entertained at the initial stage is justification for a refusal to accept the cards at face value until, with due dispatch, the truth is ascertained and the doubt resolved. Don The Beachcomber v. NLRB, supra.

The Board's opinion suggests that respondent had been committed to a duty to bargain by action of the store manager. It states: "We find, contrary to the trial examiner, that Finch, the highest official at the store, was clearly the respondent's agent with ostensible authority to acknowledge the union's majority status."

We cannot agree. Finch's lack of authority so to commit respondent was, on the very occasion of his action, communicated to union officials by respondent's attorney. Knowledge of lack of authority precludes the attaching of ostensible authority.

The Board emphasizes respondent's "delaying tactics" as reflecting upon the good faith of any doubt it may have entertained.

We wholly agree with the Board that respondent's delay in communicating the existence of its doubt and the basis for it, and in demanding an election, was inexcusable. Respondent should not, then, enjoy the benefit of employee change of mind occurring subsequent to the point at which it had a duty to act, either in recognition or in rejection of the union's showing. Retail Clerks Union, Local No. 1179, etc. v. NLRB, 376 F.2d 186 (9th Cir. 1967).

Respondent had no duty to act, however, until it had, without delay, ascertained the truth with respect to the doubt originally entertained. This occurred when, with knowledge of the fact that the contract discussed with them by union organizers was not the appropriate contract, the employees, by secret ballot, expressed their wish that representative status be ascertained by election rather than by card. From this point respondent was justified in its refusal to accept the cards as establishing representative status. International Ladies' Garment Workers' Union AFL-CIO v. NLRB, 366 U.S. 731, 81 S.Ct. 1603, 6 L.Ed.2d 762 (1966). Its doubts were than resolved by knowledge and good faith was no longer an issue upon which subsequent delay might relevantly bear. Id.

This does not excuse respondent's disregard of the union of which we continue to be highly critical. It does, however, dismiss such conduct from the ranks of unfair labor practices.

We conclude that upon the record as a whole there is a lack of support for the Board's order. Accordingly we decline to order its enforcement.

1 "158. Unfair labor practices

(a) It shall be an unfair labor practice for an employer —

(1) to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 157 of this title;

* * * * *

(5) to refuse to bargain collectively with the representatives of his employees, subject to the provisions of section 159(a) of this title."

2 "A. Sequence of events

On May 27, 1965, Respondent opened its store in Sonora, California to the public. Most of its employees were hired between April 20 and May 27, 1965. Between the period of June 3 and June 8, 1965, the Union obtained signatures on membership applications from 11 of Respondent's employees involved, and on June 9, 1965, the Union requested recognition as the bargaining representative for all selling and non-selling employees at Respondent's Sonora, California store, excluding guards, watchmen and supervisors, as defined in the Act. * * *

On June 5, Store Manager W. H. Finch first learned of the Union's organization of his employees. * * * Finch then called by telephone Paul Kase, president of Respondent, and informed him that the Union was organizing the employees. Kase told Finch that he would send him copies of a memorandum and ballots for distribution to the employees on this matter.

On June 7, Finch assembled and spoke to the employees. The Sonora store having recently opened and the permanent working force having been selected, a primary purpose of this meeting was orientation of employees. Finch discussed with them such matters as their dress, their relations with the customers, the area of their responsibility and Respondent's employee benefits. He read to them, from Respondent's operation manual, provisions on such matters as vacations, sick leave, holidays, et cetera; and on this occasion or shortly thereafter, he distributed to employees excerpts from Respondent's manual.

During the meeting, an employee asked Finch about a drug industry agreement that a union representative had shown them. Finch stated that this agreement, as such, did not pertain to the Sonora store and could not be signed by the employer as the store did not have a prescription pharmacy; that the only agreement that this store would fall under would be a variety store contract and the starting wage in it was less than the employees were currently receiving.

1. Balloting of employees, June 9, 1965

On June 9, 1965, Finch received from Kase copies of a memorandum and ballots for distribution to the employees. A copy of each was distributed to the employees working that day, and they were told that the Company would like for them to mark the ballots and place them on Finch's desk, but if they did not wish to do this, they did not have to. The memorandum is quoted as follows:

MEMORANDUM

From: Paul D. Kase June 8, 1965 To: TO ALL EMPLOYEES

Attached you will find a questionnaire which we would like to have...