NLRB v. WALTON MANUFACTURING COMPANY

• Decision Date: 09 October 1963
• Docket Number: No. 18198.,18198.
• Parties: NATIONAL LABOR RELATIONS BOARD, Petitioner, v. WALTON MANUFACTURING COMPANY and Loganville Pants Company, Respondents.
• Court: U.S. Court of Appeals — Fifth Circuit

322 F.2d 187 (1963)

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. WALTON MANUFACTURING COMPANY and Loganville Pants Company, Respondents.

No. 18198.

United States Court of Appeals Fifth Circuit.

September 5, 1963.

Rehearing Denied October 9, 1963.

Marcel Mallet-Prevost, Asst. Gen. Counsel, N.L.R.B., Dominick L. Manoli, Associate Gen. Counsel, N.L.R.B., Norton J. Come, Asst. Gen. Counsel, N.L.R.B., Washington, D. C., for petitioner.

Robert T. Thompson, Alexander E. Wilson, Jr., Atlanta, Ga., for respondents.

Before TUTTLE, Chief Judge, WISDOM, Circuit Judge, and JOHNSON, District Judge.

WISDOM, Circuit Judge.

This case is before us on remand from the Supreme Court. N. L. R. B. v. Walton Manufacturing Co., 1962, 369 U.S. 404, 409, 82 S.Ct. 853, 856, 7 L.Ed.2d 829. In our first decision, 5 Cir., 286 F.2d 16, we sustained the findings of the Trial Examiner and of the National Labor Relations Board that Walton violated Section 8(a) (1) of the Labor-Management Relations Act, 29 U.S.C.A. § 158(a) (1). Accordingly, we granted enforcement of the Board's order that the respondents cease and desist from surveillance of Union activities, interrogations of employees regarding the Union, and threats of reprisal for Union activities. We concluded, however, that considering the record as a whole substantial evidence was lacking to support the Trial Examiner's and the Board's findings that Walton violated Sections 8(a) (3) and 8(a) (1) by discriminatorily discharging four employees and laying off nine others because of their Union membership or Union activities. The Supreme Court granted certiorari in this case and in N. L. R. B. v. Florida Citrus Canners Cooperative, 5 Cir., 288 F.2d 630, because of our "seeming noncompliance with the Court's admonitions in Universal Camera Corp. v. Labor Board." 369 U.S. at 405, 82 S.Ct. at 853.

I.

In Universal Camera, 1951, 340 U.S. 474, 488, 71 S.Ct. 456, 95 L.Ed. 456, the Supreme Court admonished the reviewing court that while the

"reviewing court is not barred from setting aside a Board decision when it cannot conscientiously find that the evidence supporting that decision is substantial, when viewed in the light that the record in its entirety furnishes, including the body of evidence opposed to the Board\'s view."

it may not

"displace the Board\'s choice between two fairly conflicting views, even though the court would justifiably have made a different choice had the matter been before it de novo."

The Supreme Court's concern over the Fifth Circuit's "seeming noncompliance" with the Universal Camera admonitions is a result of a special rule announced in N. L. R. B. v. Tex-O-Kan Flour Mills Co., 5 Cir., 1941, 122 F.2d 433, 438. The reprobated Tex-O-Kan decision grappled with the difficult problem of reviewing findings of discriminatory motivation in labor discharge cases when the employer's evidence is uncontradicted or when there are inconsistent fair inferences. This is a recurrent situation in reinstatement cases alleging Section 8(a) (3) violations. As Judge Sibley for the Court saw it in Tex-O-Kan, over twenty years ago, "a cease and desist order * * costs no money and only warns to observe a right which already existed; evidence short of demonstration may easily justify such an order." But "orders for reinstatement with back pay are somewhat different":

"They may impoverish or break an employer, and while they are not in law penal orders, they are in the nature of penalties for the infraction of law. The evidence to justify them ought therefore to be substantial, and surmise or suspicion, even though reasonable, is not enough." 122 F.2d at 438.

Tex-O-Kan may be interpreted as imposing a double standard: reinstatement orders should be subjected to a more onerous test than cease and desist orders.¹ Under the Tex-O-Kan rule, as the Board construes it, the Trial Examiner may not choose between two inconsistent inferences; when employer testimony shows good cause for a discharge of an employee it must be believed unless there is evidence to "impeach" or to "substantially contradict" the employer. Thus, in N. L. R. B. v. Houston Chronicle, 5 Cir. 1954, 211 F.2d 848, 854, the Court expressed the view that where the facts give equal support to two reasonable conflicting inferences as to motive "substantial evidence has not proved the respondent to be guilty of an unfair labor practice."

Whatever efficacy the Tex-O-Kan rule once had, it has no more. In blaming Tex-O-Kan for Florida Citrus and Walton, the Board is whipping a dead horse.² Moreover, the horse has been dead for years. Thus, in the Florida Citrus opinion, 5 Cir., 311 F.2d 541, on remand, Judge Tuttle, for the Court, made the point:

"There is no lingering doubt in the minds of any of the members of this Court that "`there is no place in the statutory scheme for one test of substantiality of evidence in reinstatement cases and another test in other cases.\' 369 U.S. 404, 407, 82 S.Ct. 853, 855, 7 L.Ed.2d 829. We are equally certain that neither in our prior opinion nor in the one now under consideration has this Court applied any standard other than that announced in the Universal Camera Corporation case and reiterated by the Supreme Court in National Labor Relations Board v. Walton Manufacturing Company, and National Labor Relations Board v. Florida Citrus Canners Cooperative, 369 U.S. 404, 82 S.Ct. 853, 7 L.Ed.2d 829. As we previously stated, `We think we are required to test the Examiner\'s credibility findings in the light of his theory of credibility as he has declared it.\' We concluded previously, and now adhere to the conclusion, that his expressed theory of credibility is not acceptable. We still conclude that `sound reason, in this case, requires us to decline to go along with the Examiner in crediting these two General Counsel\'s witnesses and discrediting Stephenson.\'". 311 F.2d 541, 544.

The author of the first Florida Citrus opinion, our able brother Jones, was also the author of the first opinion in this case. We are as convinced in this case as Judge Tuttle was in Florida Citrus that the Court did not apply an erroneous standard of review.³ Nevertheless, Walton squarely presents a Tex-O-Kan problem and in the first opinion this Court did cite and quote from Tex-O-Kan. While the Supreme Court did not hold that this Court's decision was erroneous in Walton, a majority of the Supreme Court concluded:

"We are in doubt as to how the Court of Appeals would have decided these two cases were it rid of the yardstick for reinstatement proceedings fashioned in its Tex-O-Kan decision. * * * Since the special rule for reinstatement cases announced in the Tex-O-Kan opinion apparently colored the review given by the Court of Appeals of these two orders, we remand the cases to it for reconsideration."

The majority opinion in Walton does not purport to overrule or to modify Universal Camera. We have, therefore restudied that decision. It is a two-edged sword, sharpened on the legislative history of the Administrative Procedure Act and the Taft-Hartley Act. We must respect the cutting edge referred to in the excerpts from the opinion noted in the margin.⁴ With respect for both edges of Universal Camera, we have reviewed the record before us. As far as possible, we have attempted to avoid being influenced by the conclusions of the first panel which reviewed the case.

II.

A. The four discharged employees. The Board found that Lucille Yancey, Grace McCart, Pearl Coker, and Ruth Brooks were discriminatorily discharged for Union activity. We "cannot conscientiously find that the evidence supporting that decision is substantial, when viewed in the light that the record in its entirety furnishes, including the body of evidence opposed to the Board's view." Universal Camera, 340 U.S. at 488, 71 S.Ct. at 464. We consider it unnecessary to detail our reasons for reaching this result because, although we arrived at our holding as a result of our independent study, we find, upon turning to the original opinion, that we cannot improve upon Judge Jones's careful recital of the facts and conclusions relating to the four discharged employees.

B. The nine laid-off employees. On the other hand, our review of the record compels us to conclude that there is substantial evidence to support the Board's finding that nine employees were laid off because of their membership in the Union.

January 18, 1958, the Union, in an apparent effort to protect its pro-union employees, wrote Walton a letter identifying twelve employees as members of the Union's volunteer organizing committee and stating that they had been informed of their rights under the Act to engage in self-organization. Morris Scharff, Walton's principal official, promptly interrogated every employee named in the letter. In each case he asked the employee if she had authorized the Union to use her name. When the employee answered affirmatively Scharff placed a checkmark opposite her name. In some cases Scharff asked whether the employee would withdraw her name, and warned her of possible adverse consequences if she refused. Some of the warnings were thinly veiled; for example, "Do you know what this means?", and "Do you realize Evelyn, that this could work a hardship on you?". Scharff then posted the letter with the checkmarks on the company bulletin board.

In the next two weeks, the Company laid off 16 of the 105 employees in the coat plant and several employees in the pants factory. Nine of the sixteen were listed in the Union's letter.

Scharff and another Walton official testified that the layoff was required because of a cutback. They also testified that in selecting employees for layoff the Company applied objective criteria: quality of workmanship, quantity of production, versatility, and seniority. In addition, management produced evidence that a layoff was economically justified and had been decided before receipt of the Union's letter. They showed too that...