Somerset Welding & Steel, Inc. v. N.L.R.B.

• Decision Date: 22 January 1993
• Docket Number: No. 91-1441,91-1441
• Parties: 142 L.R.R.M. (BNA) 2356, 142 L.R.R.M. (BNA) 2906, 300 U.S.App.D.C. 113, 124 Lab.Cas. P 10,522, 124 Lab.Cas. P 10,618 SOMERSET WELDING & STEEL, INC., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 777

987 F.2d 777

142 L.R.R.M. (BNA) 2356, 142 L.R.R.M. (BNA) 2906,

300 U.S.App.D.C. 113, 124 Lab.Cas. P 10,522,

124 Lab.Cas. P 10,618

SOMERSET WELDING & STEEL, INC., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.

No. 91-1441.

United States Court of Appeals District of Columbia Circuit.

Argued Oct. 16, 1992.

Decided Jan. 22, 1993.

As Amended Jan. 22, 1993.

As Amended on Petition for Rehearing March 4, 1993.

Concurring Opinion of Judge Edwards on Petition for

Rehearing April 2, 1993.

Rehearing Denied March 22, 1993.

Petition for Review of an Order of the National Labor Relations Board (304 NLRB No. 21).

Richard Steyer, Washington, DC, for petitioner. William H. Howe, Washington, DC, also entered an appearance.

Robert J. Englehart, Atty., N.L.R.B., with whom Jerry M. Hunter, Gen. Counsel, Aileen A. Armstrong, Deputy Associate Gen. Counsel, and Collis Suzanne Stocking, Atty., N.L.R.B., Washington, DC, were on the brief, for respondent. Paul J. Spielberg and Frederick C. Havard, Attys., N.L.R.B., Washington, DC, also entered appearances for respondent.

Before EDWARDS, WILLIAMS and HENDERSON, Circuit Judges.

Opinion for the court filed by Circuit Judge KAREN LeCRAFT HENDERSON.

Concurring opinion filed by Circuit Judge HARRY T. EDWARDS.

KAREN LeCRAFT HENDERSON, Circuit Judge:

The National Labor Relations Board (Board) decided that Somerset Welding & Steel, Inc. (Company) had violated sections 8(a)(1) and (a)(3) of the National Labor Relations Act (Act) and ordered the Company to recognize and bargain with the United Steelworkers of America, AFL-CIO-CLC (Union) on request. The Company challenges the Board's conclusions as well as its remedy, arguing that (1) the Board's findings that a valid card majority existed and that statements by various supervisors violated sections 8(a)(1) and (a)(3) of the Act were not supported by substantial evidence, (2) even if the statements violated sections 8(a)(1) and (a)(3), they did not warrant the issuance of a bargaining order and (3) changes in management and employee turnover have made a bargaining order unnecessary. The Board cross-petitions seeking enforcement of its order. Because the Board failed to explain adequately why certain incidents violated the Act and "why traditional remedies could not reasonably ensure a fair election," Avecor, Inc. v. NLRB, 931 F.2d 924, 939 (D.C.Cir.1991), cert. denied, --- U.S. ----, 112 S.Ct. 912, 116 L.Ed.2d 812 (1992), we remand this case to the Board for reconsideration of the bargaining order remedy.

I.

On March 17, 1987, the Union filed an election petition with the Board. The Company refused to recognize the Union and allegedly began a campaign of intimidation and reprisals to encourage its employees to vote against the Union. When the election was held, the Union lost by a 71-64 vote. It then petitioned the Board claiming unfair labor practices. The Administrative Law Judge (ALJ) heard conflicting testimony, concluded that various violations had taken place and recommended that the Board issue a Gissel ¹ bargaining order. The Company filed exceptions and the Board, after reviewing the record, affirmed the ALJ's findings and recommended order except as modified.

Specifically, the Board found that Guy Rush, the Company's vice president in charge of production, repeatedly contacted employees in an effort to uncover which employees were involved in the union movement and whether the Union could be stopped. In addition, Rush implied that some of the Company's facilities might be closed if the employees unionized. According to the Board, John Tims Sr., superintendent of one of the facilities, called his son, a Company employee, two nights before the election to find out how he planned to vote. During the conversation, Tims Sr. allegedly commented that, if the Union won, the plant where Tims Jr. worked would close or the employees would lose their benefits. Tims Sr. also threatened to fire his son if he voted for the Union. Dwight Clyde, plant manager of one of the facilities, also allegedly warned several employees of plant closures if unionization occurred. On one occasion, Clyde implied, by showing that unionization would make one of the plants unprofitable, that plant closures would occur with unionization. ² Roger Pyle, a first-line supervisor, told two employees that Company Chairman Sidney Riggs would close their plant if the Union won. Rod Berkley, another first-line supervisor, allegedly opined to at least three employees that, if the Union won, the Company would move or firings and zero-based bargaining likely would occur. Finally, the Company allegedly denied employee Thomas Deist a promised pay increase after he attended a Union meeting.

Additionally, the ALJ found that certain actions of Chairman Riggs violated section 8(a)(1). At four meetings employees were required to attend, Riggs gave a presentation about the state of the industry. He identified plants of other companies that had unionized and then closed. He also expressed concern about union-led shutdowns at other plants. Allegedly, he threatened to adopt a strategy of zero-based bargaining ³ and commented that unionization would not increase employee benefits because the Company could not afford to spend more. The ALJ concluded that these actions were illegal and that "low level supervisors were largely inspired by the illicit conduct of Sidney Riggs." ALJ Op. at 47. The Board did not decide, however, whether Riggs's conduct was illegal and did not use it as a basis to affirm the ALJ's order.

II.

We recognize that our scope of review is limited. The Board's findings of fact are conclusive if supported by substantial evidence and we must give "substantial deference to inferences drawn from the facts [and] to choices of remedies." Avecor, Inc., 931 F.2d at 928 (citations omitted). Nevertheless, we do not automatically enforce a bargaining order: indeed, "[w]here a fair rerun election is possible, it must be held." Id. at 934. To enforce a Gissel category II bargaining order, three findings must be supported by substantial evidence.

First, the Union, at some time, must have had majority support within the bargaining unit. Second, the employer's unfair labor practices must have had the tendency to undermine majority strength and impede the election process. Finally, the Board must determine that the possibility of erasing the effects of past practices and of ensuring a fair rerun election by use of traditional remedies is slight and that employee sentiment once expressed in favor of the Union would be better protected by a bargaining order.

St. Francis Fed'n of Nurses & Health Professionals v. NLRB, 729 F.2d 844, 854-55 (D.C.Cir.1984). "The third finding, in addition, must be supported by a reasoned explanation that addresses several subissues." Avecor, Inc., 931 F.2d at 934-35. Here, we believe that the first and second findings are sufficiently supported but the third is not supported by adequate findings and reasoned decisionmaking.

First, we agree with the Board that the Union obtained a valid card majority. The Company claims that the Union never had a valid card majority to call for an election because Cary Mishler, who acted as a supervisor on occasion, solicited eight cards and because Brad Barclay, who solicited three cards, told the signers that the cards would have no effect beyond merely triggering an election. ⁴ Both actions, if they happened, are improper. However, we reject both claims. The eight cards Mishler solicited were properly authenticated and the evidence indicated that Mishler was no more than a sporadic assistant supervisor and therefore not a management representative (or "acting for management"). Although it is unclear what Barclay told people when he solicited cards, the cards unambiguously designated the Union as the employees' representative and were therefore valid. See Levi Strauss & Co., 172 N.L.R.B. 732, 733 (1968), enforced, 441 F.2d 1027 (D.C.Cir.1970).

On the other hand, we cannot determine whether certain of the supervisors' statements violated the Act and therefore whether they "undermine[d] majority strength and impede[d] the election process." Avecor, Inc., 931 F.2d at 934. For example, after a mandatory meeting, Dwight Clyde showed some employees a profit sheet indicating that the construction of three completed trailers generated only a slight profit margin. He added that, with any wage increases, "there'd be no way that the shop could continue to go." ALJ Op. at 19. In NLRB v. Gissel Packing Co., 395 U.S. 575, 618, 89 S.Ct. 1918, 1942, 23 L.Ed.2d 547 (1969), the Supreme Court declared that to be permitted under the Act, "[a] prediction must be carefully phrased on the basis of objective fact to convey an employer's belief as to demonstrably probable consequences beyond his control...." Clyde's comments seem to us to satisfy Gissel. The ALJ concluded otherwise: "Clyde had every right to demonstrate the slight profit margins involved in producing these three trailers, but that evidence was too isolated to privilege [sic] any comment suggesting that the trailer plant would close in the event of wage increases." ALJ Op. at 19-20 (emphasis in original). The Seventh Circuit has commented that, with respect to the restaurant industry:

we do not read Gissel to require the employer to develop detailed advance substantiation in the manner of the Federal Trade Commission, at least for predictions founded on common sense and general experience. A small company in the restaurant business should not have to hire a high-powered consultant to make an econometric forecast of the probable consequences of unionization on the restaurant business in Decatur.

NLRB v. Village IX, Inc., 723 F.2d 1360, 1368 (7th Cir.1983) (citation omitted). The same reasoning applies here. A small manufacturer is competent to recognize that if a plant is barely turning a profit on its product, any wage increase threatens its...