Plasticrafts, Inc. v. N.L.R.B.

• Decision Date: 07 November 1978
• Docket Number: No. 78-1117,78-1117
• Citation: 586 F.2d 185
• Parties: 99 L.R.R.M. (BNA) 3204, 84 Lab.Cas. P 10,890 PLASTICRAFTS, INC., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 185

586 F.2d 185

99 L.R.R.M. (BNA) 3204, 84 Lab.Cas. P 10,890

PLASTICRAFTS, INC., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.

No. 78-1117.

United States Court of Appeals Tenth Circuit.

Submitted Aug. 9, 1978.

Decided Nov. 7, 1978.

Glen A. Bergmann, Denver, Colo., for petitioner.

Allison W. Brown, Jr. and Peter Winkler, N.L.R.B., Washington, D. C., for respondent.

Before BARRETT, DOYLE and McKAY, Circuit Judges.

McKAY, Circuit Judge.

This case involves a petition for review of a National Labor Relations Board (NLRB) order and the NLRB's cross-application for enforcement of that order. We must sustain the NLRB's finding that the petitioner company violated the National Labor Relations Act (the Act) if substantial evidence on the record as a whole supports that finding. If it does, we must also grant the application to enforce the order based thereon.

The facts as found by the NLRB's Administrative Law Judge may be summarized as follows. Plasticrafts, Inc. (Plasticrafts) is engaged in the sale and fabrication of plastic products in the Denver area, employing some 80 to 90 employees. In general, its employees received periodic wage increases, although these increases were not made pursuant to any fixed schedule. An exception was the injection molding department and the machine shop, where employees (approximately eight in number) were regularly evaluated at four-month intervals and wage increases given in an amount determined with reference to certain wage-range guidelines if Plasticrafts considered the employees' performance satisfactory.

In October 1976, machine shop employee Williams made inquiry on his own behalf and that of employee Fox concerning when the next such increase would be made. His supervisor informed him it was not due in the case of himself and Fox until mid-November. In late November, employee Williams again raised the subject with his supervisor, who agreed to look into it.

On December 8, 1976, the United Rubber, Cork, Linoleum and Plastic Workers (the Union) filed a representation petition with the NLRB seeking to represent the company's production and maintenance employees. On December 12 employee Williams discussed the raise matter with the personnel manager, who in turn spoke with Plasticrafts' president. The latter thereafter convened a meeting of certain managerial and supervisory personnel at which the president, upon the advice of a representative of the Mountain States Employer's Council and an attorney, suspended all wage review and wage increases for the duration of the representation proceeding. This advice apparently was designed to avoid a possible unfair labor practice charge of using the grant of wage increases to affect the election. Williams and other employees were subsequently informed that, because of the Union petition, no raises would be granted. After the election, which resulted in victory for the Union, Williams was informed there would continue to be no wage increases until a collective bargaining agreement was reached between the Union and Plasticrafts. Between the time of the election and the execution of a bargaining agreement, several other machine shop and injection molding employees were not given scheduled wage reviews. Primarily on the basis of the testimony of the supervisor, the Administrative Law Judge concluded that such wage review would have resulted in wage increases for these employees. ¹

On these facts, the Administrative Law Judge found, and the NLRB agreed, that Plasticrafts violated Section 8(a)(1) of the National Labor Relations Act ² by withholding wage increases from employees in the injection molding department and machine shop that would have been granted but for the Union's organizational campaign and subsequent collective bargaining. The Administrative Law Judge relied chiefly on the NLRB's Gates Rubber decision, 182 N.L.R.B. 95 (1970), which states:

. . . neutrality is not maintained by an announced withholding of a wage increase because of a pending Board-conducted election. It is well settled that the employer's legal duty is to proceed as he would have done had the union not been on the scene. Here the Respondent withheld increases which would normally have been granted but for the presence of the Union and pendency of the election and advised employees that their wage increases were being withheld for this reason. By such conduct the Respondent violated Section 8(a) (1) and interfered with employee free choice.

Id. at 95.

Plasticrafts' petition in this court denominates five issues. Three of the arguments go to the standards to be employed in determining whether there has been a violation by the withholding or granting of wage increases during certain critical union activity periods. The other two deal primarily with remedy, although they include arguments related to the underlying violation.

I.

In order properly to understand the applicable standards it is necessary to point out that there are two basic situations in which questions concerning pay raise violations arise. These are: granting or withholding wage increases in deviation from a clearly apparent established practice and granting or withholding wage increases where there is no established practice.

When the status quo with respect to wage increases is Clearly apparent and it can be said with assurance that grant or denial of a wage increase, in response to protected union activity, constitutes a Change from the status quo, there need be no specific finding that the employer was prompted by anti-union motives. In such a case, the employer inevitably conveys the message that it, not the union, controls the purse strings. Employees will predictably consider that the union is somehow responsible for their failure to receive expected raises. The giving of an unexpected raise, on the other hand, will be invariably understood as an attempt by the employer to demonstrate unionization is unneeded, or as an attempt to "buy" the votes of the employees so benefited. The giving of such messages is conduct which tends to interfere with employee free choice, without regard to the employer's motive or intent. The emphasis here is not only on the existence of an established practice but also on whether it would be clearly apparent to an objectively reasonable employer. When it would not be clearly apparent to a reasonable employer whether it had an established practice with regard to wage increases, then an unfair labor practice violation is not shown unless there is an adequately supported finding that the employer was motivated by anti-union sentiments. That an Administrative Law Judge with the benefit of hindsight and complete data might later "find" that there Was a status quo would be irrelevant; the focus is whether the status quo would have been clearly apparent to an objectively reasonable employer At the time. This is so because it "is not always clear to the employer whether a wage increase would conform to the status quo or depart from it." Free-Flow Packaging Corp. v. N. L. R. B., 566 F.2d 1124, 1129 (9th Cir. 1978).

On the other hand, when there is no established practice with regard to wage increases, no inference automatically attaches in the mind of the employee to the giving or not giving of wage increases. In this situation it must be affirmatively shown that the employer was motivated by anti-union sentiments to establish a violation of Section 8(a)(1) of the Act, since in such an ambiguous situation the employee is unlikely to draw a predictable conclusion from the employer's course of conduct.

Plasticrafts contends that the finding of a violation in this case was erroneous because there was no showing of anti-union motive on its part. ³ Insofar as Plasticrafts argues that unlawful motive must be shown in each and every Section 8(a)(1) case, it is mistaken. As discussed above, it need be shown only in some situations where a violation is alleged. See N.L.R.B. v. Otis Hospital, 545 F.2d 252, 254-55 (1st Cir. 1976).

Insofar as Plasticrafts argues that for the employees in question it had no clearly established wage increase practice or that it was unable to ascertain the existence of an established practice at the time, its argument is not persuasive.

Substantial evidence supports the Administrative Law Judge's finding that with regard to injection molding and machine shop employees, there was a clearly established status quo as to wage increases. We think the record shows that status quo would have been clearly apparent to a reasonable employer in Plasticrafts' position. ⁴

Williams and Fox were told at the time of their hiring that their performance would be evaluated at approximately four month intervals and that an increase would be granted them if their performance had been satisfactory. Fox and Williams, pursuant to this policy, received increases in January, April and July of 1976. Fox, Williams and two other employees were scheduled for job evaluations and wage increases in November 1976. Plasticrafts, Inc., N.L.R.B. Division of Judges, No. 27-CA-5273 (Sept. 29, 1977) (hereinafter cited as Opinion of the ALJ) at 3-4. The supervisor

. . . credibly testified that each of four employees . . . would have received a favorable job evaluation and would have been entitled to a wage increase in mid-November . . . . (His) testimony establishes the existence of a departmental policy of periodic wage increases, and the employees did, in fact, receive wage adjustments in 1976 at varying intervals approximating or averaging every 4 months.

Opinion of the ALJ at 4. Other employees in these departments would have received wage increases on specific dates in January and February. Id. at 9.

Unlike J. J. Newberry Co. v. N. L. R. B., 442 F.2d 897 (2d Cir. 1971), cited by Plasticrafts and discussed at note 3, where review was regular but wage increases "subjective and discretionary," Id. at 900, in these departments at Plasticrafts ...